5.4: Sources of Marketing Information

Varieties of sources are at the disposal of most restaurant operations to begin and maintain a marketing information system. These information sources can group into two main categories: secondary data and primary data. Secondary data are past collections, usually for other purposes. Primary data come about for a specific purpose to gather information not available elsewhere. The information search should begin with secondary data to instituting a primary data collection process. In most cases, secondary data normally provides the information necessary to make a decision, and even if they do not, they are typically useful in developing research questions and moving the primary data collection process forward. Collecting primary data requires though and planning and thus - time to gather and process the findings. Figure 3.9 illustrates the possible sources of information for marketing purposes.

Secondary Data

Secondary data is already available from other sources and summarizes information about operations, marketing, human resources, financial performance, and other topics of interest to restaurant management. A perceptive manager will make a thorough check of all available secondary data sources before undertaking primary data collection. This will save the large amount of time involved with the primary data collection process, as well as the money spent to collect the information needed. Some of the major advantages of using secondary data include cost, and timeliness.

Cost

It is generally much less expensive to obtain information from existing sources than to develop entirely new data at your own expense. Some existing sources may charge a nominal fee for the information, bit it will be far cheaper than the cost of undertaking a primary collection process.

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 months for primary data collection, analysis, and summary. Primary data collection is not time efficient is the sense that one must develop the research methodology, design the data collection instrument, pre-test the instrument, devise a sampling scheme, gather data, analyze the findings, and finally summarize and report the results. With secondary data, the manager need only locate the appropriate source and access the information desired. Thus, the information search reduces from weeks or months to hours or at the extreme, days. However, secondary data collection can have the following disadvantages: limited applicability, outdated information, and reliability.

Limited applicability

There is no assurance that information gathered by others will be applicable to a particular restaurant operation. For example, geographic differences can influence customer preferences and perceptions. Another example would be different restaurant segments, such as the varied characteristics of QSR, casual and fine dining operations. Thus, information that pertains to one operation may apply only to that operation and be of limited value to anyone else.

Information may be outdated

Restaurants 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. Consider the results of a consumer attitude survey conducted by a restaurant two years ago. Depending on the market environment, that survey could be of limited value to the restaurant planning for today. During that time, a number of changes in consumer attitudes are likely to have taken place. These changes can render the original data outdated and useful only in a historical sense. Therefore, management's use of less than timely data could result in less than satisfactory outcomes.

Reliability

Reliability and accuracy are important concern when decisions center on the information. Utilize only sources with reliable reputations, and gathering methods in the operation's decision process. Management should always attempt to confirm who collected the data and the method of data collection protocol. Caution should always be the order of the day when secondary data drive decisions.

There are two main types of secondary data useful to a restaurant operation as Figure 3.9 indicates. Internal data exists within the firm and is obtainable with minimal time and effort. Advances in computer technology have made it easier to obtain pertinent information and provide to management in a useful form. External data are not readily available within the operation. This form of data acquisition occurs 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.

Internal Data

The component of a marketing information system that is the simplest to design and implement is an internal system, the collection of data from within the restaurant organization. When considering the organizational environment, management need to be concerned only with the wealth of information available from within the physical confines of the organization's restaurant units. Management has three main sources of internal marketing information: guest histories and sales data, employees and management staff, and customer feedback.

Guest histories and sales data

There are no hard and fast rules for management regarding exactly what records the operator should maintain. Those decisions must center on the intrinsic needs of the organizational. Within a restaurant operation, management should have knowledge of, and monitor, zip code origin of guests, day of the week and meal preferences, and pertinent customer data to name a few items for tracking. The records maintained should also include customer counts for each meal period and sales for each menu item over a specified period. Many larger organizations have elaborate management information systems in place. Many point of sale terminals interface with personal computers, making the transfer of data to off-the-shelf database management and accounting software relatively easy. Mangers can now use the collected customer information to increase the volume of business by targeting current customers via information gathered about them from within the confines of the restaurant. Figure 5.9 provides sources.

Employees and management staff

Too often, restaurant management overlooks the wealth of information for gathering informally from hourly employees such as restaurant back and front of the house workers. These individuals are in constant contact with guests, yet they rarely have the chance to supply information regarding customer comments and reactions to operational changes, such as new menu items or changes to the dining room. 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. Use the opportunity to gather information and provide recognition for the integral help employees provide in making the operation successful.

Customer feedback

The focus of any marketing effort centers on the restaurant operation's clientele. All aspects of the entire operation should aim 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 occur in a number of ways, such as having the manager talk with a few customers or having service personnel check with their customers. One method frequently used is the customer comment card. The operator can place these cards on the table, or provide them to the guest upon checkout or possibly in some cases, on the customer bill itself. The questions for the comment card usually pertain to the quality of the meal and/or the operation itself.

All three sources of marketing information are valuable. When viewed as a collective tool they can provide a great deal of useful information for decision-making. Historically, restaurant managers have failed to use these sources to their maximum advantage, but the current competitive environment dictates that all sources of information may be useful to gain a competitive advantage and to earn maximum financial rewards.

External Data

Externally generated marketing information, though valuable, is normally not a priority on a daily basis, as is the case with internally generated information. This is due to the much larger investment of time, money, and other scare resources required in the gathering process. Still, management should consider using the wide variety of sources of this form of data. Literally thousands of sources are available, and thus any limitations regarding these sources occur from management’s own ineffective efforts to locate them. Some major sources with discussion follow.

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 average that can be useful to measure an operation'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 collections of information from 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 a visitor’s bureau 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 widely available to restaurant operators. 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, Nation's Restaurant News, Restaurant Hospitality, Restaurant Business, Lodging Hospitality, 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 success and failures of hospitality organizations.

Other periodicals

In addition to trade journals of a particular industry, other publications cover business in a variety of industries. Some of the more popular business publication s 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 has occurred at a rapid pace. Using one or more of the available Internet search engines can produce highly valuable information for managers. A key consideration regarding the Internet, as with other secondary information sources, is the accuracy and usefulness of the information gathered.

University sources

Universities and colleges typically have well-stocked libraries that can be a valuable resource for foodservice operators. These institutions often have access to many other sources of external data. In addition, universities and colleges form centers to research specific areas such as hospitality. Most of the information available is free to the public.

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 pools, 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 form of information is useful in focusing on these services often advertise in trade publications and marketing periodicals.

Guides, indexes, and directories

These publications are other valuable sources of external information that are available at most university libraries and larger public libraries. Guides such as Business Periodicals Index provide references by subject matter for articles in major journals and trade publications. In addition, most of the 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 publically traded companies.

Guidelines should be followed when collecting external information and include listing the fact that are already known to avoid duplication of effort, listing specific goals and objectives to properly direct the information search, using valid and reliable collection methods to increase the accuracy of the information gathered, and summarizing and reporting the information found and its pertinence to the operation.

Primary Data

Primary data consists of original research done to answer current questions regarding a specific restaurant operation. For example, a foodservice manager may attempt to ascertain consumer attitudes towards 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 organization but my not be applicable to others. The advantages of using primary data include specificity, and practicality.

• Specificity. These data are customizable to one operation and can provide excellent information for decision-making purposes that is not available from other sources.
• Practicality. Primary data can provide solid, real-life information and a practical base foundation to be useful in the decision-making process.

The disadvantages include cost, time lag, and duplication.

• Cost. For an individual operator, gathering primary information 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 have to occur quickly, yet it requires a good deal of time to conduct a thorough information-gathering study. While the operation is collecting the data, the competition could hurt the operation to the point of bankruptcy.
• Duplication. While primary data focus 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 become non-productive. Stated differently, it would probably be better to test the findings of other studies in different markets than to research the same questions again in your own market. Trying and monitoring is less costly and close observation is possible. However, if the results are positive, then the time lag, cost, and duplication have been worth the effort.

In general, the advantages of using secondary data ten to be the disadvantages of using primary data, and vice versa. As previously stated, 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.