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Chapter 7 Marketing Research and Sales Forecasting 147
Copyright © 2013 Nelson Education Limited
CHAPTER 7
MARKETING RESEARCH, DECISION SUPPORT SYSTEMS, AND SALES
FORECASTING
CHAPTER OVERVIEW
Collecting and managing information about what customers need and want is a challenging task for
any marketer. This chapter focuses on marketing research—the process of collecting and using
information for marketing decision making. It explains that data comes from a variety of sources—
from well-planned studies, sales force reports, accounting records, or published reports, and from
controlled experiments and computer simulations.
The chapter also focuses on the impact of technology in the market research process—right from
data mining, data collection, analysis of the gathered information to market research decision
making and planning—which is aimed at gathering business and competitive intelligence.
Chapter 7 also includes the ways market research affects promotional decisions, sales forecasts,
and growth predictions. Why is research needed? Marketers use research to understand their
customers, target customer segments, and develop long-term customer relationships—all keys to
profitability. Information collected through marketing research underlies much of the decision
making involved in market segmentation, discussed in Chapter 8.
The marketing research function is the primary source of information and is clearly central to
effective marketing decisions. This chapter also explains how marketing research techniques are
used to make accurate sales forecasts, a critical component of marketing planning.
Changes in the Third Edition
The chapter has been updated and revised in several ways. New material has been added to
several sections, including an expanded discussion of interpretative and ethnographic research.
A number of new features are now part of Chapter 7:
• The Opening Vignette and Connecting with Customers profile how loyalty or points cards
are used in marketing research. This section has been updated to reflect the changes in
loyalty programs since the last edition. Loyalty programs such as Air Miles track shoppers’
buying habits based on information collected from retailers. The input is anonymous, so it
can be pooled into a shared, or cooperative, base that creates reports for clients without
compromising the privacy of those who volunteered the information. Loyalty programs are
an effective means of collecting information about shopping habits because so many
Canadian participate in at least one program.
148 Part 3 Target Market Selection
Copyright © 2013 Nelson Education Limited
• Solving an Ethical Controversy looks at issues around the type of information being
collected by marketers. Is the collection of sensitive information an invasion of an
individual’s privacy? Does the collection of sensitive information lead to stereotyping and
prejudiced behaviour or do the benefits to organizations outweigh the privacy issues?
• Career Readiness provides advice on a popular and relatively inexpensive form of
marketing research in “Planning Effective Online Surveys.” Online surveys give respondents
anonymity, which helps most people speak more freely, and the chance to answer questions
at their pace. Tips are provided on how to create successful online surveys, making sure
that the marketer gets the desired results and that the respondents’ time is not wasted.
• Go Green looks at how LoyaltyOne Inc., the company that introduced the Air Miles program,
took the results of their research into the importance of the environment and introduced a
new loyalty program. The My Planet program rewards consumers who purchase products
that reduce carbon dioxide emissions and other harmful chemicals in order to conserve
natural resources.
• Marketing and the SME profiles the FACESofCHANGE research project. The project
combined online research with more traditional research methods to uncover a deeper
understanding of the relationships between media, people, and brands in the 18- to 24-year-
old demographic.
• Marketing in a Digital World examines the Optimum Public Relations study into whether
Facebook Likes could predict elections. Starting with a study conducted in the United
States, the company followed Canadian candidates from across the country during a recent
election to determine if there was link between how many “likes” a candidate received and
their success in the election.
• Chapter Case 7.1 looks at how “Market Research Companies Scan the Globe for Marketing
Data.” Two companies, NPD and Nielsen, use various techniques to research such issues
as whether an increase in gas prices will affect consumer spending patterns. The results of
the research projects undertaken by these companies are discussed and how these types of
research projects can assist marketing decision makers.
• Chapter Case 7.2 “Mapping the Market—Location-Based Marketing” discussed the
advantages of using smartphone technology to collect information about where people are,
when, how often and who they are with. Marketers are able to send marketing information to
customers as they enter a store or restaurant. This new technology is not without some
privacy issues however. If the marketers know you are not at home—then would-be thieves
could as well.
• Video Case Synopsis includes an overview of Ogden Publications. The video is designed
to expand and highlight the concepts in this chapter and the concepts and questions
covered in the written video case.
Chapter 7 Marketing Research and Sales Forecasting 149
Copyright © 2013 Nelson Education Limited
LECTURE OUTLINE
Opening Vignette and Connecting with Customers—“Points Cards or Market Research.” Should data from
shoppers be cross-referenced to form consumer profiles? Would you care if your purchases were used to
create a massive database?
Chapter Objective 1: Describe the development of the marketing research function and its major
activities.
Key Terms: marketing research, syndicated service, full-service research supplier, limited service
research supplier
Basic PowerPoint: 1,3,7
Expanded PowerPoint: 1-8
1. What is marketing research?
a. Marketing research is the process of collecting and using
information for marketing decision making.
b. Data comes from a variety of sources, such as well-planned
studies, sales force reports or accounting records, or controlled
experiments and simulations.
c. By presenting pertinent information in a useful format, marketing
research aids decision makers in analyzing data and suggesting
possible actions.
d. Marketing research helps marketers in understanding
customers, targeting customer segments, and developing long-
term relationships.
2. The marketing research function
a. The underlying purpose of marketing research is to find out
more about consumers, clearly central to effective customer
satisfaction and long-term relationships.
b. Development of the marketing research function
i. In 1879 the first organized marketing research project
was organized; in the early part of the 20th century, the
first commercial research department was established.
ii. In the first known study, Charles Parlin counted soup
cans and found that working-class families bought more
canned soup than wealthy ones, convincing Campbell
Soup to place ads aimed at this population.
iii. Research methods became more sophisticated in the
1930s due to the development of statistical techniques.
iv. Advances in computer technology have led to significant
changes, including the addition of simulations that allow
marketers to pose “what if” questions.
c. Who conducts marketing research?
i. The size and organizational form of the marketing
research function are usually tied to the firm’s structure.
ii. Firms organize research units by product lines, brands,
geographic areas, or the type of research needed.
d. Many organizations depend on independent marketing research
firms due to several factors:
i. Cost is often the reason for using an external firm.
ii. Information collected is often more reliable and accurate
150 Part 3 Target Market Selection
Copyright © 2013 Nelson Education Limited
Go Green: Loyalty
Cards Go Green. How
much of an impact do
you think programs
like My Planet have on
the environment?
What other things can
companies do with
loyalty programs to
promote environmental
awareness?
than what could be gathered in-house.
iii. Technical assistance and expertise not available within
the contracting firm can be provided.
iv. Results may be more objective and unbiased since an
outside firm has less tendency to set up a study just to
validate a favoured theory or certain opinion.
e. Classification of marketing research firms:
i. Syndicated services—organizations that regularly
provide standardized sets of data to all customers
ii. Full-service research suppliers—organizations that
contract with clients to conduct complete marketing
research projects (providing qualitative and quantitative
data from field studies, face-to-face and phone
interviews, online surveys, as well as public opinion
polls, etc.)
iii. Limited-service research suppliers—firms that specialize
in a limited number of activities such as conducting field
interviews, testing promotional materials, or doing data
processing
3. Customer satisfaction measurement programs
a. Measurement programs allow marketing firms to focus on
tracking the satisfaction level of a client’s current customers.
b. Valuable insights can be obtained by tracking dissatisfaction that
has led customers to abandon the firm’s products.
c. These “customer defects” may be absolute (they leave) or
partial (they remain with a product but aren’t completely
satisfied).
d. Some firms conduct their own measurement programs through
online polls and surveys.
Assessment check questions
1. Identify the different classifications of marketing research suppliers and
explain how they differ from one another. Marketing research suppliers can be
classified as syndicated services, which regularly send standardized data sets to
all customers; full-service research suppliers, which contract to conduct
complete marketing research projects; or limited-service research suppliers,
which specialize in selected activities.
2. What research methods can be used to measure customer satisfaction?
Some companies look at feedback from existing customers, for instance, hiring
marketing research firms to collect and analyze customer feedback at their
websites. Other firms collect feedback about customer defections—why a
customer no longer uses a product. Other organizations conduct research
through online polls and surveys.
Chapter Objective 2: Explain the steps in the marketing research process.
Key Terms: exploratory research, sales analysis, hypothesis
Basic PowerPoint: 9
Expanded PowerPoint: 9-14
Chapter 7 Marketing Research and Sales Forecasting 151
Copyright © 2013 Nelson Education Limited
Figure 7.1 The
Marketing Research
Process. Which steps,
if any, might be
conducted by the firm
in-house? Which might
be better left to an
outside marketing
firm?
1. The marketing research process
a. The chances of making good decisions improve when the right
information is provided at the right time during decision making.
b. To meet this goal, researchers often follow six steps in the
marketing research process:
i. Define the problem
ii. Conduct exploratory research
iii. Formulate a hypothesis
iv. Create a research design
v. Collect data (primary and secondary)
vi. Interpret and present the research information
2. Define the problem
a. A well-defined problem is half solved, because it permits the
researcher to focus on securing the exact information needed
for the solution.
b. It is important not to confuse symptoms of the problem with the
problem itself.
i. A symptom merely alerts a marketer that a problem
exists.
ii. To identify the problem itself, marketers need to look for
the underlying causes of the symptom.
iii. To do this, a starting point might be to evaluate the
firm’s target market and marketing mix element.
3. Conduct exploratory research
a. Exploratory research looks for causes of a problem by
discussing it with informed sources (both within and outside the
firm) and by examining data from other sources.
i. This includes speaking with employees as well as
evaluating company records, sales and profit analyses,
and competitive data.
ii. This internal data collection is often referred to as
situation analysis.
iii. Exploratory interviews with informed persons outside the
firm are referred to as informal investigation.
b. Using internal data
i. Marketers can find valuable data in their firm’s own
internal records such as sales records, financial
statements, and marketing cost analyses.
ii. Sales analysis compares actual and expected sales
based on forecasts, often using sales quotas to look at
expected and actual results.
iii. Other breakdowns divide transactions by customer type,
product, sales method, or order size.
iv. Sales analysis is one of the least expensive and most
important sources of marketing information.
v. Accounting data, often summarized in financial
152 Part 3 Target Market Selection
Copyright © 2013 Nelson Education Limited
statements, can be used to compare current and
previous years against industry benchmarks.
vi. Marketing cost analysis is the evaluation of expenses for
tasks such as selling, warehousing, advertising, and
delivery to determine profitability.
vii. These forms of internal data are most .useful when they
provide information linked to other forms of marketing
research.
4. Formulate a hypothesis
a. A hypothesis is a tentative explanation for some specific event.
b. It is a statement about the relationship among variables that
carries clear implications for testing this relationship.
c. It sets the stage for in-depth research by clarifying what
researchers need to test.
d. While not all studies test specific hypotheses, a carefully
designed study can benefit from a clear hypothesis set up
before beginning data collection.
5. Create a research design
a. A research design is a master plan or model for conducting
marketing research.
b. It helps clarify for marketers that the study will measure what
they want it to measure.
c. It also allows for the selection of the respondents, or sample, to
be studied.
Assessment check questions
1. What are the six steps in the marketing research process? The marketing
research process can be divided into six specific steps: (1) defining the
problem, (2) conducting exploratory research, (3) formulating a hypothesis, (4)
creating a research design, (5) collecting data, and (6) interpreting and
presenting research information.
2. What is the goal of exploratory research? Exploratory research seeks to
discover the cause of a specific problem by discussing the problem with
informed sources within and outside the firm and examining data from other
sources.
Chapter Objective 3: Distinguish between primary and secondary data and identify the sources of
each type.
Key Terms: secondary data, primary data
Basic PowerPoint: 15
Expanded PowerPoint: 15-17
1. Collect data
a. Marketing research gathers two kinds of data—secondary and
primary.
b. Secondary data is information from previously published or
compiled sources (such as Census data).
Chapter 7 Marketing Research and Sales Forecasting 153
Copyright © 2013 Nelson Education Limited
Solving An Ethical
Controversy – What
Kind of Information
Should Marketers
Collect? Are there
other types of data that
students feel
researchers should not
be collecting? What
impact will privacy of
information laws have
on collecting of
sensitive data?
Note: If you were
asked to research
trends in the Canadian
population over the
past five decades,
which sources would
you use?
c. Primary data is information collected for the first time specifically
for a marketing research study.
d. Secondary data offers two big advantages:
i. It is less expensive to gather.
ii. It takes less time to locate and use the data.
e. Secondary data also has limitations:
i. Published data can quickly become obsolete.
ii. Data collected for an unrelated purpose may not be
completely relevant to the marketer’s specific needs.
f. Primary data costs more and takes longer to gather, but often
results in richer, more detailed information than secondary data.
g. The choice between secondary data and primary data is usually
tied to cost, applicability, and effectiveness; many marketing
studies use both types.
2. Interpret and present research information
a. The final step is to interpret the findings and present them to
decision makers in a format that allows management to make
effective judgments.
b. Differences in interpretation can arise due to differing
backgrounds, levels of knowledge, or experience.
c. Oral and written reports should be used to minimize this
misinterpretation of data.
d. Researchers and users must be determined to cooperate at
every stage and communicate directly.
e. Studies may go unused because management thinks the results
are of little use or hard to understand.
f. Marketers should clearly spell out conclusions, avoid overly
technical language, and present results to all concerned at the
same time if possible.
g. Decision makers can then quickly reach consensus on what the
results mean and what actions need to be taken.
3. Marketing research methods
a. Data collection is clearly an integral part of the process—without
it there would be no research.
b. A time-consuming task is determining which method to use to
obtain data, usually either secondary or primary data collection.
4. Secondary data collection
a. Most secondary data is available for little or no cost.
b. The challenge is selecting from a wealth of sources only that
data which is relevant to the issue being studied.
c. Secondary data consists of two types:
i. Internal data includes sales records and activity reports,
product performance reviews, sales force activity reports
and marketing cost reports.
ii. External data comes from government records,
syndicated research services, and industry publications.
5. Government data
a. The federal government is the nation’s most important source of
154 Part 3 Target Market Selection
Copyright © 2013 Nelson Education Limited
marketing data and Census data represents the most frequently
used government statistics.
b. Statistics Canada polls the population every five years and
provides results to the public for free.
c. It also conducts periodic surveys of housing, population,
business, manufacturing, agriculture, mining, and governments.
d. Statistics Canada offers vast information broken down by small
geographic areas.
e. Beyond federal sources, data is also provided by Province and
city governments.
6. Private data
a. Many organizations offer data through their own channels
i. Business and trade associations often offer data through
their publications.
ii. Encyclopedia of Associations, available in many
libraries, lists trade associations.
iii. The advertising industry continually publishes data on
various audiences.
iv. Guide to International Periodicals lists trade publications
that publish industry-specific research.
b. Regardless of source, data security and public use of private
information is always an issue.
c. Data from trade journals can be gathered directly from the
publishers or through online periodical databases at libraries
such as ProQuest Direct’s ABI/Inform.
d. Electronic systems that scan UPC bar codes also collect data
for inventory control, ordering, and delivery.
e. Radio-frequency identification technology (RFID) is new
technology that tracks individual purchases but involves major
privacy concerns, so it’s currently used for aggregate data only.
f. ACNielsen SalesNet offers scanner information from grocery
stores in commercially available databases.
7. Online sources of secondary data
a. Hundreds of databases and other sources of information are
available online
i. Internet-based marketing research projects may cost
less and yield faster results than traditional research.
ii. The Internet has led to a growth in research
aggregators—companies that acquire, catalog, reformat,
segment, and then resell already-published premium
research reports.
iii. Social networking sites yield valuable marketing
information.
iv. Google Analytics is a business tool for measuring online
sales, tracking e-mail and ad campaigns, and
benchmarking key measures against competitors. It
Chapter 7 Marketing Research and Sales Forecasting 155
Copyright © 2013 Nelson Education Limited
helps companies target online ads to people who might
be interested in them.
v. Researchers must evaluate the validity of the
information they find on the Internet. The phrase caveat
emptor (“let the buyer beware”) should guide evaluation
of secondary data on the Internet.
Assessment check questions
1. Distinguish between primary and secondary data. Primary data are
original; secondary data have been previously published.
2. What are the major methods of collecting secondary data? Sources of
internal data include sales records, product evaluations, sales force
reports, and records of marketing costs.
Chapter Objective 4: Explain the different sampling techniques used by marketing researchers and
identify the methods by which marketing researchers collect primary data.
Key Terms: sampling, population, probability sample, nonprobability sample, interpretative research, mall
intercepts, focus groups, controlled experiment, test-market
Basic PowerPoint: 18,19,22-24
Expanded PowerPoint: 18-24
1. Sampling techniques
a. Sampling is the process of selecting survey respondents or
research participants.
b. It is one of the most important aspects of research design
because if a study uses a sample different from a target market,
the results will be misleading.
c. A population or universe is the total group of people the
researcher wants to study.
d. Unless it’s very small, data is rarely gathered from an entire
population, resulting in a census, due to high costs.
e. Instead they work with a sample, a representative group chosen
from this population and classified as either probability or
nonprobability types.
2. Probability sample
a. A probability sample gives every member of the population a
chance of being selected.
b. Types of probability samples:
i. Simple random sample—every member of the relevant
universe has an equal opportunity of selection.
ii. Stratified sample—randomly selected subsamples of
different groups represented in the total sample.
iii. Cluster sample—researchers select areas (or clusters)
from which they draw respondents.
3. Non-probability sample
a. A nonprobability sample relies on personal judgment in the
selection process as researchers decide what groups to study.
156 Part 3 Target Market Selection
Copyright © 2013 Nelson Education Limited
Note: Have you ever
been involved in taking
a survey? Did you face
any difficulties? Did it
affect the accuracy
and validity of the
result?
Figure 7.2 Types of
Primary Research.
Which type is the most
subjective? The most
objective? What are
the advantages of
each type?
b. Types of nonprobability samples:
i. Convenience sample—a group selected from readily
available respondents, also called an “accidental
sample” because those included just happened to be in
the place where the survey was conducted.
ii. Quota sample—A list of needed types of respondents,
divided to maintain representations for different
segments or groups as seen in the entire population.
4. Primary research methods
a. Marketers use a variety of methods for conducting primary
research, including observation, surveys, and controlled
experiments.
b. The choice of method depends on the issues under study and
the decisions that marketers need to make, so at times
researchers combine techniques during the process.
5. Observation method
a. In observational studies, researchers view the overt actions of
the subjects studied, trying to understand how consumers
behave in certain situations.
b. Technological advances provide increasingly sophisticated ways
for observing consumer behaviour, such as electronic people
meters used by the TV industry to monitor viewing habits.
c. Marketers worry that consumers don’t use these devices
correctly, so additional technology such as a portable people
meter (PPM) has been invented to check their actual habits
versus what they enter.
d. Due to TiVo and other digital recording devices, Nielsen Media
Research now releases findings on viewing habits in three
versions: live, live plus 24 hours, and live plus seven days.
e. Other observational techniques include videotaping consumers
in action, conducting focus groups, and asking consumer panels
to responding to certain queries in person or online.
f. Interpretative research—Ethnographic Studies
i. Interpretative research is a method in which a
researcher observes a customer or group of customers
in a natural setting.
ii. The behaviour is interpreted based on an understanding
of the social and cultural characteristics of that setting.
6. Interpretative research—Ethnographic Studies
a. Interpretative research is an observational method developed by
social anthropologists to explain behaviour that operates below
conscious thought.
b. It provides insights into consumer behaviour and the ways in
which consumers interact with brands.
c. It’s conducted by observing customers in their natural setting,
then interpreting their behaviour based on social and cultural
characteristics of that setting.
Chapter 7 Marketing Research and Sales Forecasting 157
Copyright © 2013 Nelson Education Limited
Marketing and the
SME:
FACESofCHANGE.
Do you think the
FACESofCHANGE
research was an
effective way to reach
the 18- to 24-year-old
consumer? Why or
why not? Are there
other research
methods that may be
more effective?
i. It’s sometimes referred to as ethnography, because the
researcher spends an extensive amount of time
studying the culture (“ethnographic” means a researcher
takes a cultural perspective on the population studied).
ii. For that reason, interpretative research is used
domestically to look at consumer behaviour in a foreign
country, where language, ideals, values, and
expectations are subject to different influences.
d. Interpretative research focuses on understanding the meaning
of a product or the consumption experience in a consumer’s life.
e. It captures what they actually do, not what they say they do.
f. This research takes time and money, so it’s only used when a
firm wants a detailed look at how consumers use its products.
7. Survey method
a. Observation cannot supply all of the desired information, so
researchers must ask questions to get information on attitudes,
motives, and opinions.
b. Observation doesn’t obtain exact demographic information—to
get that, researchers use interviews or questionnaires.
c. Telephone interviews
i. Telephone interviews are a quick and inexpensive
method for obtaining a small quantity of relatively
impersonal information.
ii. Simple, clearly worded questions are easy for
interviewers to pose over the phone and are effective in
drawing appropriate responses.
iii. Telephone surveys have relatively high response rates,
particularly with repeated calling, and some firms use
computerized random dialing to speed up the process.
iv. However, phone surveys have drawbacks: people
refuse to do them due to the time needed, the nuisance
factor, negative associations with telemarketing, or
poorly designed surveys.
v. Also, results may be biased by the omission of certain
households or those with unlisted numbers.
vi. Caller ID and other electronic devices are designed to
block calls and act as obstacles to phone surveys.
vii. Consumers are increasingly concerned about privacy
issues and information given over the phone.
viii. Phone surveys can be useless abroad in areas where
telephone ownership is rare, directories are lacking, or
charges are made when accepting calls; results in these
cases will be highly biased.
d. Personal interviews
i. Personal interviews are the best method for obtaining
detailed information about consumers, as the
interviewer can establish rapport and explain confusing
or vague questions.
158 Part 3 Target Market Selection
Copyright © 2013 Nelson Education Limited
Career Readiness—
Planning Effective
Online Surveys.
Think of a time you
came across an online
survey. Did you have
any concerns? Did you
participate?
ii. Drawbacks: they can be time-consuming and expensive.
iii. They may be conducted in homes but also at locations
allowing private interviewing space, often in shopping
centers in the form of mall intercepts.
e. Focus groups
i. A focus group brings together individuals in one location
to discuss a subject for an hour or two with a moderator
to stimulate conversation and encourage interaction.
ii. Focus groups encourage discussion rather than using a
question-and-answer format.
iii. They are a quick and inexpensive method of gaining
insight into consumer attitudes and motivations.
iv. In a focus group, the leader, or moderator, typically
suggests an opening topic. The moderator’s purpose is
to stimulate interaction among group members. It is a
difficult job that requires preparation and group
facilitation skills.
v. They are a valuable tool for exploratory research,
developing new product ideas, and preliminary testing of
alternative marketing strategies, and can help to design
questionnaires for a larger study.
vi. Drawbacks of focus groups: people may be dishonest or
affected by peer opinions, the environment may be
sterile and unnatural, and the small size may not be
representative of the larger population.
vii. Online focus groups can be more cost- and time-
efficient than traditional formats, have better attendance,
and are less affected by peer pressure.
viii. Drawbacks of online formats: lack of access to body
language or nonverbal cues, difficulty in testing
products, tendency toward non-representative samples
f. Mail surveys
i. Mail surveys are a cost-effective alternative, providing
anonymity that may encourage respondents to give
candid answers.
ii. They can help marketers track consumer attitudes
through ongoing research and may provide needed
demographic information.
iii. Drawbacks: low response rate, slow response time,
complexity of the questions, no way to respond to
concerns, and the possibility of bias.
iv. Mail surveys do better if questionnaires are very short
and an incentive is offered.
g. Online surveys and other Internet-based methods.
i. Using the Web allows researchers to speed the survey
process, increase sample sizes, ignore geographic
boundaries, and dramatically reduce costs.
ii. Online surveys are less intrusive than phone surveys,
allowing respondents to take part at their convenience.
Chapter 7 Marketing Research and Sales Forecasting 159
Copyright © 2013 Nelson Education Limited
Marketing in a Digital
World: Can Facebook
Likes Predict Election?
How effective do you
think this type
research would be in
predicting marketing
and promotional
campaigns on
Facebook? Support
your answer.
iii. They’re often considered novel and easy to do, leading
to higher response rates and becoming a popular and
cost-effective way to sample customer feedback.
iv. Businesses often include questionnaires on their
websites to solicit information about consumer
demographics, attitudes, and their suggestions for
improving the product or the marketing message.
v. Online polling is also increasing in popularity.
vi. There is no industry standard to measure website use,
while marketers try counting hits, tracking with cookies
(now unpopular), or asking visitors to register.
vii. Observing consumers online offers marketers the
opportunity to monitor the buying decision process,
understand what turns a browser into a buyer, see how
shoppers compare product features, and grasp the
relative impacts on purchase decisions of marketing and
price.
8. Experimental method
a. The least-used method for collecting primary data is the
controlled experiment.
i. This is a scientific investigation in which a researcher
manipulates a test group and compares the results with
those of a control group that did not receive the
experimental manipulation.
ii. The most common use of this method by marketers is
test marketing, or introducing a new product and then
observing its degree of success.
iii. Test marketing may follow periods of information
gathering or focus groups, so it would be the first stage
at which a product performs in a real-life environment.
iv. Some firms omit test marketing and go directly from
product development to full-scale production.
b. Some drawbacks of test marketing:
i. It is an expensive and labour-intensive operation.
ii. Some products aren’t suited to test marketing.
iii. Competitors quickly learn about the new product and
can develop competitive strategies.
iv. Few firms test market long-lived, durable goods—such
as appliances and automobiles—because of the major
financial investments required for their development.
c. Alternatives to test marketing:
i. Firms that skip test marketing can simulate a campaign
through computer-modeling software.
ii. They might offer an item in just one region or country,
then adjust promotions and advertising based on local
results before expanding to other locations.
iii. Similarly, they might limit a product’s introduction to only
one retail chain, then monitor results closely.
160 Part 3 Target Market Selection
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Assessment check questions
1. What is sampling? Sampling is the process of selecting representative
survey respondents or research participants from the total universe of
possible participants.
2. What are the different types of probability and nonprobability samples?
Types of probability samples include simple random samples, stratified
samples, and cluster samples. Nonprobability samples are convenience
samples and quota samples.
3. What are the major methods of collecting primary data? Three principal
methods of primary data collection are observation, survey and
interview, and experimentation.
4. Identify the different types of survey methods. Different survey methods
may include telephone interviews, personal interviews, focus groups,
mail surveys, and online or other Internet-based methods.
5. How is interpretative research typically conducted and when should
ethnographic research be used? Interpretative research observes a
customer or group of customers in their natural setting and interprets
their behaviour based on social and cultural characteristics of that
setting. Ethnographic research is used to look at the consumer
behaviour of different groups of people.
Chapter Objective 5: Explain the challenges of conducting marketing research in global markets
and outline the most important uses of computer technology in marketing research.
Key Terms: marketing information system (MIS), marketing decision support system (MDSS), data mining
Basic PowerPoint: 25, 26, 29-31
Expanded PowerPoint: 25-31
1. Conducting international marketing research
a. Though the steps are similar, new challenges arise when
gathering information about consumers in foreign markets.
b. Canadian firms can tap many secondary resources when
researching global markets, particularly through the government.
i. Industry Canada and U.S. Department of Commerce are
good sources of Information.
2. Challenges of conducting international marketing research:
a. Language issues—communicating the message in the most
effective way
b. Cultural issues—capturing local citizens’ interests while avoiding
missteps that could unintentionally offend them
c. Business environment—political and economic conditions,
potential for growth, and trade regulations that affect research
studies and data collection
d. Some adjustment in the collection of data for primary research
may be necessary.
i. Some methods do not easily transfer across national
boundaries.
ii. Face-to-face interviewing is the most common method
used outside North America.
Chapter 7 Marketing Research and Sales Forecasting 161
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iii. Mail surveys are usable only in developed countries,
otherwise they’re useless due to low literacy rates,
unreliable mail service, and lack of address lists.
iv. Telephone surveys may not be suitable in areas where
service is limited or phone ownership is rare.
v. Focus groups may be difficult to arrange due to social
and cultural issues.
e. Some firms tap local researchers or those experienced in global
studies to investigate foreign markets.
3. Computer technology in marketing research
a. The ability to quickly gather and analyze business intelligence
can create a substantial strategic advantage.
b. Computer databases, whether internal or maintained outside the
firm, can be designed to gather facts about a firm’s consumers.
c. Computer technology assists with the marketing information
system (MIS), marketing decision support system (MDSS), data
mining, business intelligence, and competitive intelligence.
4. Marketing information system (MIS)
a. Managers used to complain there was too much data to sort
through, data was irrelevant, or information was impossible to
find.
b. A marketing information system (MIS) is a planned computer-
based system that provides decision makers with a continuous
flow of information relevant to their areas of responsibility.
c. A well-constructed marketing information system serves as a
nerve center, continually monitoring both internal and external
market environments and providing instantaneous information.
d. Marketers are able to store the data for later use, classify and
analyze that data, and retrieve it easily when needed.
5. Marketing decision support system (MDSS)
a. A marketing decision support system (MDSS) consists of
software that helps users quickly obtain and apply information
as a foundation for decision making.
b. It allows managers to connect such diverse information as the
state of the market, consumer behaviour, sales forecasts,
actions of competitors, and environmental changes.
c. MDSS has four major characteristics: it is interactive,
investigative, flexible, and accessible.
d. It can create simulations or models to illustrate the likely results
of changes in marketing strategies or market conditions.
e. While the MIS provides raw data, the MDSS develops that data
into useful information.
6. Data mining
a. Data mining is the process of searching customer files to detect
patterns, identifying relationships not obvious to marketers, and
in a sense answering questions that haven’t yet been asked.
b. Data mining is a way to sort through huge amounts of data
stored in a data warehouse and make sense of it, find patterns,
and use that intelligence to review effectiveness of strategies.
162 Part 3 Target Market Selection
Copyright © 2013 Nelson Education Limited
c. It helps marketers create customer profiles, pinpoint reasons for
customer loyalty (or lack of loyalty), analyze the potential returns
on price and promotion changes, and forecast sales.
7. Business intelligence
a. Business intelligence is the process of gathering and analyzing
information to improve strategies, tactics, and daily operations.
b. It can report on a firm’s sales operation or focus on finding
information about competitors.
c. The key is collecting precise information and getting it into a
format that managers can understand and use.
8. Competitive intelligence
a. Competitive intelligence is a form of business intelligence that
focuses on finding information about competitors.
b. It uses published sources, interviews, observations, government
agencies, public filings, and other secondary sources including
information found on Internet sites.
c. The aim is to uncover the specific advantages of competitors.
d. Marketers use the results to make better decisions that
strengthen their own competitive advantage.
Assessment check questions
1. What are some organizations that can serve as sources of international
secondary marketing data? Industry Canada and the U.S. Department of
Commerce offer reports and guides for many countries.
2. Distinguish between an MIS and an MDSS. A marketing information
system (MIS) is a planned computer-based system designed to provide
managers with a continuous flow of information relevant to their specific
decision-making needs and areas of responsibility. A marketing decision
support system (MDSS) is a marketing information system component
that links a decision maker with relevant databases and analysis tools to
help ask “what if” questions.
3. What is data mining? Data mining is the process of searching through
huge consumer information files or data warehouses to detect patterns
that can help marketers ask the right questions and guide marketing
decision making.
4. Describe the process of collecting business and competitive intelligence.
Business intelligence is the process of gathering information and
analyzing it to improve business strategy, tactics, and daily operation.
Competitive intelligence focuses on finding information about
competitors using published sources, interviews, observations by
salespeople and suppliers in the industry, government agencies, public
filings such as patent applications, and other secondary methods
including the Internet.
Chapter Objective 6: Identify the major types of forecasting methods.
Key Terms: sales forecast, qualitative forecasting, quantitative forecasting, jury of executive
Chapter 7 Marketing Research and Sales Forecasting 163
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opinion, Delphi technique, survey of buyer intentions, trend analysis, sales force composite,
exponential smoothing
Basic PowerPoint: 32-34
Expanded PowerPoint: 32-35
Table 7.1 Benefits and
Limitations of Various
Forecasting
Techniques, Which
techniques would be
best for a firm with a
limited budget? For a
firm with a time
crunch? For a firm
willing to pay for
detailed and realistic
information?
1. Sales forecasting
a. A sales forecast is an estimate of a firm’s revenue for a specified
future period.
b. Forecasts play major roles in new-product development,
production scheduling, financial planning, inventory planning
and procurement, distribution, and human resource planning.
c. An inaccurate forecast can lead to poor or incorrect decisions in
these areas.
d. Marketing research techniques are used to create and deliver
effective sales forecasts.
e. A forecast sets standards against which to measure actual
performance; without standards, no comparisons can be made.
f. A short-run forecast covers up to one year, an intermediate
forecast covers one to five years, and a long-run forecast
extends beyond five years.
g. Types of sales forecasting methods:
i. Qualitative forecasts—techniques that rely on subjective
data rather than exact historical data
ii. Quantitative forecasts—techniques that rely on
statistical computations
iii. Each method has benefits and limitations; most firms
rely on a combination of the two
2. Qualitative forecasting techniques
a. Planners use qualitative forecasting techniques when they want
judgmental or subjective indicators.
b. Qualitative forecasting techniques include jury of executive
opinion, Delphi technique, sales force composite, and survey of
buyer intentions.
c. Jury of executive opinion
i. The jury of executive opinion technique combines and
averages the outlooks of top executives from each of
the functional areas of the firm.
ii. It’s a quick and inexpensive method that often generates
good forecasts for sales and new-product development.
iii. It works best for short-term forecasting.
d. Delphi technique
i. The Delphi technique solicits opinions from several
people, but also gathers thoughts from experts outside
the firm, such as academic researchers.
ii. It is most appropriately used to predict long-run issues,
such as technological breakthroughs, that could affect
future sales.
iii. A firm selects a panel of experts and sends each a
questionnaire, combines and averages answers,
develops another questionnaire based on the results,
164 Part 3 Target Market Selection
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and sends it back to the same people.
iv. The process continues until it identifies a consensus, so
the Delphi technique is expensive and time-consuming.
e. Sales force composite
i. The sales force composite technique develops forecasts
based on the belief that organization members closest
to the marketplace offer the best insights concerning
short-term future sales.
ii. These forecasts typically work from the bottom up.
iii. Drawbacks: forecasts are conservative because their
numbers ultimately determine sales quotas, or they’re
based on a narrow perspective or geographic territory.
iv. This method works well only in combination with other
techniques.
f. Survey of buyer intentions
i. A survey of buyer intentions gathers input from various
sources to determine the purchasing intentions of a
representative group of present and potential
customers.
ii. It’s impractical for firms with millions of customers but
works well for those with a limited number of customers.
iii. Drawbacks: intentions are just that, intentions, and may
not translate into actual sales.
iv. Buyer surveys produce useful information only if
consumers reveal their true thoughts and feelings.
v. This is also a time-consuming and expensive process.
3. Quantitative forecasting techniques
a. Test Markets
i. Test markets gauge and assess consumer response to
a new product under actual marketplace conditions.
ii. Different prices, alternative promotion strategies, and
other marketing mix variations can be evaluated.
iii. The big advantage is that they provide realism.
iv. Drawbacks: they’re expensive and time-consuming
experiments that may unwittingly signal marketing plans
to competitors.
b. Trend analysis
i. Trend analysis develops sales forecasts by analyzing
the historical relationship between sales and time.
ii. It implicitly assumes that the collective causes of past
sales will continue to exert similar influence in the future.
iii. When historical data is available, trend analysis is a
relatively inexpensive technique.
iv. Drawbacks: It can’t be used without historical data,
(such as for new-product forecasting) and the quality of
the forecast is only as good as the data available.
v. It makes the dangerous assumption that future events
will continue in the same manner they have in the past.
Chapter 7 Marketing Research and Sales Forecasting 165
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vi. But it does give reliable forecasts during periods of
steady growth and stable demand.
c. Exponential smoothing
i. Exponential smoothing is a sophisticated version of
trend analysis, weighing each year’s sales data and
giving greater weight to results from most recent years.
ii. It’s considered to be the most commonly used
quantitative forecasting technique.
Assessment check questions
1. Describe the jury of executive opinion. The jury of executive opinion
combines and averages the outlooks of top executives from areas such
as marketing, finance, production, and purchasing.
2. What is the Delphi technique? The Delphi technique solicits opinions
from several people but also includes input from experts outside the firm,
such as academic researchers.
3. How does the exponential smoothing technique forecast sales?
Exponential smoothing weighs each year’s sales data, giving greater
weight to results from the most recent years.
Projects and Teamwork Exercises
1. Nielsen offers data collected by optical scanners from the United Kingdom, France, Germany,
Belgium, the Netherlands, Austria, Italy, and Finland. This scanner data tracks sales of UPC-coded
products in those nations. In small teams, imagine that you are one of Nielsen’s clients. One team
might be a retail chain, another an Internet company, and still another a toy manufacturer. Discuss
the types of marketing questions these data might help you answer. Share your list with other
teams.
Start a discussion on ACNielsen and the ways in which it collects data via optical scanners from the
United Kingdom, France, Germany, Belgium, the Netherlands, Austria, Italy, and Finland. Ask
students to explain how this scanner might track sales of UPC-coded products in those nations.
Then have teams (representing retail chains, Internet companies, and toy manufacturers) talk about
the types of marketing questions that this data might help answer. Have students write down the
questions that come to mind and then share them with the class.
2. Discuss some of the challenges Pizza Hut might face in conducting marketing research in
potential new international markets. What types of research would you recommend the company
use in choosing new countries for expansion?
Have students talk about the challenges Pizza Hut may be facing in conducting marketing research
on the potential new international markets. When a country wants to expand into foreign nations,
what kind of information does it need? What types of research would provide it?
3. Working alone or with a partner, choose a new product idea, or a variation on an existing
product, that you think will appeal to your classmates, such as yogurt or an energy drink in new
flavour, and devise a test-marketing plan for it. Determine where you will test your product and
166 Part 3 Target Market Selection
Copyright © 2013 Nelson Education Limited
which variables you will assess, such as price and promotion activities. Be prepared to present your
plan to the class and include a description of the information you hope your test market will provide.
Have students select a product that is new, or modified. Existing products are to be avoided in this
exercise. Students must select the appropriate, relevant variables, and suggest plans to test market
the product. There are many ways to do test marketing, such as showing it to potential buyers,
creating a blog or a website, determining the correct prices, asking a buyer, comparing product with
others, and taking it to a trade show. They should present their ideas, as well as the expected
responses.
4. Interpretative research offers marketing researchers many possibilities, including the opportunity
to improve product features such as packaging for food or over-the-counter medication that is
difficult for seniors or people with disabilities to open. List some other ways in which you think this
observation method can help make existing product offerings more appealing or more useful to
specific kinds of users. What kind of products would you choose, and how would you test them?
Have students share their lists of the ways in which the observational method works to make
existing products appear more appealing or useful. Have them explain how interpretative research
can be used to explore product features such as packaging for food or over-the-counter medication
that is difficult for seniors or the disabled to open. What kind of products did they choose? How
would they test them? Start a discussion on the ways in which interpretative research can be used,
and the situations in which it might not be the best choice.
5. McDonald’s conducts extensive marketing research for all its new products, including new menu
items for its overseas stores. Due to cultural and other differences and preferences, the company
cannot often extrapolate its results from one country to another. For instance, Croque McDo fried
ham and-cheese sandwiches are unlikely to be as popular in North America as they are in France,
which invented the croquet monsieur sandwich on which McDonald’s product is based. Can you
think of any other kinds of firms that share this limitation on global applications of their research? In
contrast, what sorts of questions could multinational firms answer on a global basis? Why?
Start a discussion on this broad topic. As McDonald’s conducts extensive marketing research for its
new products, it must take into account differences in cultures, tastes, and preferences. But it can’t also
use results of one study for its marketing in another country. What other industries or broad business
areas did students think of that are also limited in this way on a global basis. How can their global
research be improved? And what questions could multinational firms answer? Continue the discussion
by having students suggest names of well-known companies and their products that might have trouble
transferring their product from one nation to another.
Critical-Thinking Exercises
1. Some companies are broadening their markets by updating classic products to appeal to younger
people’s tastes and preferences. What primary and secondary market information would you want
to have if you were planning to reinvigorate an established brand in each of the following
categories? Where and how would you obtain the information?
a. household cleaner
b. moist packaged cat food
c. spray starch
Another Random Scribd Document
with Unrelated Content
We crept slowly forward among legs and arms. A dozen men
were snoring around us, and one fellow turned over, muttering
something in his sleep, as my boot brushed against his shoulder. The
ladder was gained. We climbed up the side of the great machine
without a sound, and took our places within, as best we could in the
darkness. Again Torry's mouth was at my ear.
"I must wait a minute," he said, "until my eyes become
accustomed to the light. As soon as I can see the outlines a little
better we are off!"
The silence was only broken by the breathing of the sleeping
men around us. I was in an agony of suspense fearing there would
be some hitch at the last—something wrong about the machine
which might prevent its rising. The time seemed eternal. But the
great open end of the barn was growing in clearness of outline. The
fog was friendly; but the dawn was approaching. Again my brother's
hand was upon my shoulder.
"Now brace yourself!" he said; "we are going!"
The air ship trembled. It was a sensation never experienced
before. The vibrations seemed to pass through the innermost fibers
of my being. I felt that we were being lifted in the air, and then that
we were slowly floating out at the open end of the barn.
There was a shout and a curse and a call to arms. Noiseless as
our movements had been, the men were aroused, and in an instant
a score of voices were calling and yelling in every direction:
"Stop thief! Surround the barn! Where are they?"
A hideous medley of curses, groans, and sounds of fighting rose
through the darkness from every quarter of the field; but the air ship
was far above, and hidden from eight in the dense gloom of the
morning fog.
"Let them fight it out among themselves," said Torrence,
drawing a long sigh of relief; "we shall never see them again!"
We rose steadily and slowly for several minutes, Torrence saying
it would be necessary to be well above the houses, as we were
going to pass directly over London and must take no risk of a
collision in the darkness. Presently I could feel that we were
sweeping ahead. The movement was perfect, and as we sped rapidly
forward through the dense atmosphere, catching an occasional glint
of a street lamp below, all sense of fear departed. The trembling had
ceased; and I felt as though we were floating rapidly away on the
breast of a cloud, or upon, the back of some monstrous bird; only
here there was no effort. It was the only element comprehended. I
could imagine nothing more sublime, more exhilarating. It was the
absolutely finished poetry of flight. Beyond this, there was a feeling
of safety far surpassing that of earthly locomotion, possibly due to
the knowledge that we were lifted clear above all obstacles; that no
uncertain switch, or ill-timed train could affect us. On we swept, in
an ecstasy of rapture, realizing neither our speed nor place,
engrossed only with the novelty of our situation, and watching the
coming dawn.
Suddenly a great, dazzling object not twenty yards away flashed
past us.
"Great God!" exclaimed Torrence, rising, "I thought I was too
high for that."
"What was it?" I asked in amazement.
"The cross on top of St. Paul's!"
We had narrowly missed it, and caught sight of it, just as it
reflected the first rays of the rising sun, in a rift of the fog, and just
as I was congratulating myself upon being above every earthly
object. But it was a clear miss and no harm done.
Presently the fog cleared and we looked down upon the great
city of London speeding away below.
"And where are we going, old man?" I inquired at last, hardly
able to contain myself with the strange delight of this new sensation
of flying.
"To the North Pole!" said Torrence, holding fast to his levers,
screws, and steering apparatus.
IX.
With the rising of the sun the fog cleared, and the great city of
London was spread out away beneath us. It was a sight I can never
forget, and a sensation unequalled by any previous experience.
Patches of smoke blocked out large areas of the metropolis, but
there was promise of a day of rare, Spring-like beauty. As we floated
aloft, above the smoke and grime, through an atmosphere of
translucent purity, we watched with interest the shifting masses
beneath, and drank in with delight the marvelous scene. On and on
we flew, at one moment unscreened from the streets and houses of
the city, at, the next catching only occasional glimpses of a tower or
steeple piercing an earthward cloud, like the finger of a submarine
monster pointing heavenward. But far to the north the smoke had
vanished, and the green fields of Spring would soon be under us. It
was a dream of bliss, transcending the power of words to picture, or
the imagination of man to conceive.
"It makes me shudder," said Torrence, "to think of what a
narrow escape we had just now. A few feet more to the left and we
would have banged into St. Paul's cross!"
I admitted that it would have been an ugly collision.
"The truth is," he continued, "I miscalculated our height; and in
the fog and darkness, we may have had some other close shaves,
for all I know."
"Hardly," I answered; "the houses in London are not high, as a
rule."
"There are the Queen Anne flats at Victoria station," observed
Torrence.
"True; but surely we did not go as far to the west as that?"
"Indeed we did. I ran considerably out of our course
intentionally. You see I wanted to take in London by daylight; and
wouldn't have missed the sight for a barrel of money. I ran slow, as
well as indirectly, or we would have been well out of Middlesex by
now. But I really thought we were higher, and should have consulted
the barometer; but in getting away from those hounds I never
thought of it. But thank God we're all right now. How do you like the
air ship?"
"It's the grandest thing on the earth or off of it!" I answered;
"but you haven't told me why those fellows wanted us; and why we
had to sneak out of the hotel like thieves."
"There's lots of time for that," he answered; "but let us not miss
this sight while we have it."
And I did not want to miss it myself, but before we had quite
passed the suburbs Torrence explained as follows:
"You remember Hart?" he began.
"Perfectly; you mean Wetherbee's partner; the fellow we had
our first interview with."
"Yes. Well, do you know that when the scoundrel discovered
that we were building the machine without his aid, and that we were
becoming the talk of London for our wealth, and manner of living,
he was consumed with envy, and fearing that he had lost a good
thing, got out an injunction against our moving the vessel, on the
ground of being Wetherbee's partner? Of course he totally
misrepresented the facts, and——"
"Then you did violate the law after all!" I exclaimed, feeling that
I had been deceived.
"Not in the least!" he answered; "the paper was never served; I
took care that it shouldn't be. But there were men in waiting at the
entrance to the Mustapha, who confidently expected to catch me as
I passed in or out, and if I had not come by a private entrance and
left as we did, we should be down there now, and perhaps for a year
to come, waiting the settlement of a legal investigation. Now, I knew
if I stopped to explain matters to you, we might not get off. You
would naturally argue the point, and the precious time be lost. I was
warned of this pending injunction by one of the gentlemen I
introduced you to in the billiard room, who certainly did me a very
decent turn in return for my favors in the money line. The fellow
found it out quite accidentally, but he didn't forget me."
I was amazed, and greatly relieved to find so simple an
explanation of what, but a few hours before had a painfully criminal
aspect. If Torrence could explain the mystery of his sudden wealth
as satisfactorily I should be more than gratified; and this I suggested
to him.
"My dear boy," he answered, "every penny I have spent will be
as satisfactorily accounted for as being my own legitimate money as
what I have just told you. I have never committed an illegal or
dishonorable act in its acquirement, and when the time comes to
explain, I will do it; but not yet."
He touched a button on his left, and I was conscious of slightly
increased speed.
The green fields were now beneath us, and the few clouds that
hovered above only kept the sun from being too warm. The motion
of the most perfect boat, gliding before an imperceptible breeze,
would be barbarous compared with ours.
Our vessel was loaded with every luxury, including such clothing
as we should need in the latitudes we proposed to visit. And not only
were there suits for cold weather but for warm as well, we having
left our trunks at the Mustapha. Furs and eider-downs were here
galore, beside every contrivance for Arctic comfort. Beyond these,
we had abundance of fire-arms, and ammunition. Our sleeping
apartments were luxurious. They were situated forward, with a
comfortable bed in each, and separated by a curtain with rings
which slid upon a brass rod, running parallel with the length. Our
cooking arrangements were astern, and immediately before them
our dining room or saloon—a cosy little apartment with sliding
windows, which could be opened to admit the purest air in the
world. Indeed the ventilation had been admirably planned, and
nowhere, or in any kind of weather need we suffer from a fetid
atmosphere. In the center, but below the main deck, was the motive
power, controlled from a small table above, where Torrence
manipulated screws, levers, and springs, utterly beyond my
comprehension. The machinery was entirely out of the way, and the
space utilized to admirable advantage. Cushioned seats surrounded
the wall of the saloon, and above was an open deck which ran the
entire length of the boat. This was surrounded by an aluminum rail,
filled in with a fine net of the same material. It required more nerve
than I possessed at first to mount the ladder and look out over the
taffrail, although the sense of security below was perfect, so that I
could inspect the country from the saloon windows with as much
indifference as though I were on the deck of an ocean steamer. It
was not long, however, before I could go above and lean over the
bulwarks with equal intrepidity. Through the hatch the sky was
always visible, even in the saloon, which was never closed except in
cold or stormy weather.
In order to make the construction of our air ship perfectly clear,
let the reader imagine a gigantic cartridge or cigar, tapering at each
end. Now flatten the top of your cigar, and put a railing around it
and it would represent our upper deck. Now, divide your cigar
longitudinally halfway between the upper deck and the bottom, and
from end to end; and you have our main deck; in the center of
which is the saloon or dining room, or general living room, to the
rear of which is the kitchen, and forward, our beds. Beneath this
deck is the machinery, entirely out of sight, and operated from either
the saloon or the upper deck.
Our larder was more than ample; comprising an endless variety
of tinned goods, as well as quantities of such vegetables as would
keep in the open. We had large supplies of both fresh and salt
meats, and all arranged to handle conveniently. In short, it was a
camping outfit upon an extended scale, including wines, fruits,
medicines and implements which might become necessary during
the voyage. Having to do our own work, the equipment had been
planned upon the most judicious and labor saving lines, so that it
was astonishing how little effort was required to prepare a meal; and
having no back yard to keep tidy, it was only necessary to throw the
scraps and refuse overboard.
At times when we hovered nearer the surface of the earth it
was amusing to see what excitement we caused the populace. In
passing over a village the entire population would turn out into the
streets, and shout themselves hoarse before leaving them out of
sight, and being unlike the ordinary balloon, we were naturally
looked upon with greater astonishment. Torrence having set his
controlling apparatus, it no longer required attention, until some
change in speed, elevation, or direction was desired; so that he was
as free to move about the vessel as I was. The landscape was
passing beneath us, with a steady flowing motion, giving the
impression that a considerable distance would be covered during the
day, although the rate of speed was deceptive. It was interesting to
trace our course over the charts, with which we were amply
provided. Maps of each of the counties were spread out upon the
table, and we were singularly well situated to test their accuracy.
I was wondering how fast we were going and inquired.
"About twenty-five miles an hour," said Torrence; "she is capable
of much greater speed; but there's no hurry, and I don't want to
strain her on her maiden trip."
"And how high are we?"
"About five hundred feet."
I was reflecting that it was no very great height, or
extraordinary speed, when I heard the sharp swinging sound of a
bullet, and looked down. I saw a man passing through a field with a
gun in his hand and looking up. Evidently he had fired at us, not
knowing what we were; possibly with the intention of finding out.
"He's going to shoot again!" I called to Torrence; but at that
minute my brother pressed a button and we were swung aloft with
great velocity, as if seized by some gigantic hand.
"I shan't give him a chance," he answered, as we plunged into a
cloud, and then darted forward with increased speed. Again we were
enveloped in a dense wet blanket, but as there was no fear of a
collision, did not slacken our rate, but swept on like a hurricane
unable to see a thing in any direction beyond the vessel.
"Now," said Torrence, looking at a small instrument on the
governing board, "we are whirling along at the rate of fifty miles an
hour. Risky business on land in a cloud like this, but here—thank
Heaven—there is nothing on the track! When we lower ourselves out
of the fog, and come in view of the earth again, our sporting friend
will be lost to sight."
In about ten minutes we dropped to our former level, and
reduced our speed. Of course there was no reason why we should
not remain above, except that it was more interesting to have the
earth for a companion.
"Suppose he had hit us?" I observed.
"There's not one chance in a hundred that he would hurt us if
he had. I prepared for such enterprising fools by protecting her
critical parts with asbestos and rubber; but it isn't pleasant to be
fired at, and when one can move out of range so easily it seems the
right thing to do."
Later in the day I went above and found it the pleasantest part
of the boat, and was surprised to find how all fear had left me. I
asked Torrence if he intended to land anywhere in England; to which
he gave a negative answer, saying that it might not be safe, from
the danger of having papers served upon him.
"There is no necessity to halt," he added; "our course is
probably watched, and the news of our landing will be telegraphed
to London, and they might make it difficult for us to get away again.
We are safe out of their reach now, and it would be better to lot well
enough alone. When I land it will be upon some uninhabited coast
where they can't find us."
"How long can you keep afloat?" I inquired.
Torrence laughed.
"Forever, if I want to. There's no limit to our capacity in that
line. When the chemicals are exhausted, or have formed new
combinations, I have only to supply the proper proportions of air and
water, and the original conditions are restored. So if for any reason it
should prove inconvenient to land, all we have to do is to drop a line
with a bucket over any river or sea, and pull up a pail of water, run
the compressor into the generator with the chemicals—and presto—
all the power is restored. It is perpetual motion, with the very
minimum of attention. Rather it is gravitation neutralized; and so
simple, it is a marvel men never thought of it before."
I had made no inquiry about the North Pole, supposing it was
only a jest; not doubting, however, that he really meant to make an
extended trip northward; but now, on alluding to the subject,
Torrence declared that it was his serious intention to penetrate into
the mysteries of the Polar regions, farther than any navigator had
ever gone.
"We may find it worth our while," he said, "and there is no
reason why we should not."
I told him that while I felt some doubt about the ice barriers, I
was ready to follow him anywhere; to which he answered with a
good deal of force that so long as the vessel depended only on the
atmosphere for her support, he could see no reason why we could
not ride over icebergs, frozen mountains and continents, to the ends
of the earth. All we had to do was to keep above all obstructions,
and to prevent ourselves from freezing, against which possibility we
were amply provided. He showed me how our saloon could be made
perfectly snug, and heated to any temperature desired; and that the
motive apparatus was entirely protected, and could likewise be kept
warm.
"Should our upper deck become loaded with snow," he added,
"we shall be obliged to put on our extra feathers and go above to
clean it off; not such a very difficult matter when you consider that
we are well provided with the appliances."
Indeed, it seemed to me that nothing had been overlooked, and
as Torrence had all his life had a hankering for Arctic exploration, I
was not greatly astonished at his decision. I reflected that the pole
could never be reached except by balloon, and that the difficulty of
ordinary ballooning was the impossibility of advancing against air
currents, and that since our ship had overcome that point, it did
really appear as if we might be in a fair way to accomplish
something more than other explorers. I became greatly interested,
and began to look for marvelous results.
At noon I went into the galley and prepared dinner, while
Torrence kept watch above on the upper deck, where there was also
a duplicate controlling board. We had eaten nothing since the
previous night; the excitement of getting off having kept the thought
of food from entering our heads, but now we were hungry. It was
undoubtedly the first time since the creation that a meal had been
cooked and eaten at that elevation over Northhampton, but it was
none the worse for that, and two hungrier men could not have
honored the occasion. From our seats in the saloon we had a good
outlook upon every side. Forward we looked directly ahead through
the cuddy ports—aft—through our stern lights in the galley, and
upon either side were great sliding windows. The watch was, of
course, only to guard against any unexpected elevation in the land,
such as a hill, otherwise—or even had we been a little higher—we
might have drawn the blinds and run on with impunity. After dinner
we threw the scraps overboard, and went on deck for a smoke, and
watched the country steadily slipping away beneath us. We were
fanned by a gentle breeze, which might have been stiffer, but such
wind as there was, was blowing dead aft.
"This," said Torrence, looking about him with pride, "is what I
call the climax of living. Above your enemies; above your friends;
and out of reach of all the petty annoyances of earth!"
I was as jubilant as he, and found it quite as difficult to conceal
my emotions, which were altogether natural; for has not flight been
always regarded as a prerogative of angels? and has not man
aspired to it as the most perfect form of migration? The exhilaration
was beyond description; and as we swept on through that long
summer day, there was a sense of power and freedom which no
other form of locomotion could impart.
"I could never be content to live down there again!" I said,
flipping the ashes from my cigar overboard.
"Nor I," said Torrence; "not after this experience. The sky is
good enough for me!"
Toward evening we could hear the tinkling of bells and lowing of
herds, and catch an occasional shout of surprise from a frightened
farmer, as we dipped a little nearer earthward, and then skurried
aloft and away, before he had time to recover his equanimity. At a
small village in the southern part of Lincolnshire we pounced
suddenly upon a traveling circus, and stampeded the entire crowd,
not one of which will ever forget us. It was the grandest game
imaginable; to come swooping down to within fifty or seventy-five
feet of the ground, over an unsuspecting congregation of
countrymen, and then dart onward and upward amid their shouts of
consternation. However, we did not indulge in this sort of thing
often, not wishing to incur the risk of being fired at. It showed,
nevertheless, the absolute control we had over the machine, and
was interesting from a scientific, as well as a humorous point of
view.
Toward sundown I smelled salt air, and knew we were
approaching the sea. Then we ran into a bank of mist, and the earth
was lost to view. I asked Torrence where we were heading for, and
he said:
"I am going to run around the city of Hull; leaving it a few miles
upon our right, so as not to attract attention, and then cross over to
Norway."
"You surely don't intend to try the North Sea to-night!" I
exclaimed in surprise.
"Why not? There is no danger," he answered.
I did not argue the matter, feeling safe in his hands. The fog
bank continued for some minutes, and when we suddenly ran out of
it, imagine my astonishment to find ourselves hovering directly over
a large city, with the sea beyond.
X.
Torrence jumped up in consternation, and looking overboard,
exclaimed with an oath that he thought we were at least five miles
to the southwest of that town.
"And what difference does it make?" I inquired.
"Look for yourself!" he cried; "they are expecting us. I feared
our course would be telegraphed to all sea ports; but they shan't
track me out of the country," he added, looking aloft significantly,
"that is, not if I can help it."
"I should say we had decidedly the whip handle of them!" I
replied.
"So we have. Of course they can't stop us, but I think it will be
just as well to give them a false scent for their trouble. It may be
interesting to use a little strategy with these people, Gurt, although
we are undoubtedly masters of the situation."
Looking down I saw that the streets were crowded with people
gazing up at us; and around the Wilberforce monument, on both
sides of the bridge, it looked as if a mob had gathered to intercept
our progress. In the open square, probably not less than a hundred
soldiers had been assembled under arms, and had a very
threatening aspect.
"Surely they won't fire on us!" I exclaimed.
"Not a bit of danger, they wouldn't dare; and if they did, they
couldn't hurt us. No, the red coats are only for show; but if they got
ugly, we could clean out the crowd by simply dropping a lot of
cartridges overboard, without taking our guns out of the racks."
He pressed a button, turned a lever, and we slowed down.
"They want to speak to us, and perhaps it will be just as well to
give them a chance."
A man was waving a white flag, evidently intended to attract
our attention. He appeared to be some high functionary of the town,
judging from his dress and general deportment. He held a paper in
his other hand, which he indicated was for us. Torrence waved his
handkerchief in reply, and pulled the air ship down to a dead halt,
about two hundred and fifty feet above the level of the street.
"It may be the injunction!" I suggested.
"Too late for that now," said Torrence; "they can't enjoin me
after I've left. But I don't want them to know my course, and shall
therefore humbug them a little."
He looked earnestly above at a great white cloud that had crept
up from the southwest, and which had now nearly covered the sky.
He then took a pencil, and with a writing pad resting on the rail,
wrote:
"If you have any communication to make I will let down a line."
This he threw overboard. It was picked up immediately, and
handed to the official who was standing quite separate from the
others. Shouts of "lower your line!" were now heard distinctly, and in
another minute we had dropped a cord overboard, with a screw tied
to the end for a weight. It did not take long to draw up the line
again, at the end of which was an official looking document.
Torrence tore open the envelope hastily, and began reading. In a
minute he thrust it into his pocket and said:
"Rot!"
"What's the matter?" I asked him.
"That blackguard, Hart, wants to get me back to London.
Pretends I've committed a crime by moving the air ship without his
consent. Promises forgiveness—the lunatic—if I'll return; and—of all
the gall in creation—says he will pay down a handsome sum, as he
calls it, for a half interest in the air ship, if I'll come back and make it
over to him; and then to cap the climax, has the effrontery to
threaten me if I don't do it. The fellow must either be a dolt himself
or take me for one. But I'll make it interesting for him,
nevertheless!"
"They must take us for a brace of nincompoops," I replied; "but
is it in the form of a summons?"
"Seems to be a kind of capias for my arrest, but how on earth
can they execute their orders while I'm up here?" said Torrence.
"You surely don't intend to return," I said, looking over his
shoulder.
"Of course not; but I'm determined not to be tracked out of the
country. The man has done all he could to thwart me by foul means.
He has tried to entrap me in a pretended form of law. He
endeavored to prevent my sailing by procuring an injunction issued
upon false representations, and if he's fool enough to suppose that
I'd return to London—why let him suppose it, and wait, and sweat!"
He now headed the air ship toward London, and rising, sailed
away from the town.
"Let them think what they please!" he said. Torrence got up on
the top deck and waved his hat, and then every one shouted. I think
there was some doubt, however, as to whether we really intended to
return, until they saw us gradually head about, and point our prow
toward London; then there was an unmistakable yell of delight from
every throat.
We were soon running against the wind, due south. The cloud
bank which had been steadily pushing up out of the southwest now
nearly covered the sky at an elevation of many thousand feet. The
city of Hull was fading in the distance. It would soon be lost to sight.
I looked at the earth below, and saw that we were steadily
ascending upon an inclined plane.
"When we are wrapt in the bosom of the clouds," said Torrence,
"I intend to put about, and run directly over their heads, out of
sight, and be far to seaward before the sun sets."
The clouds were still at a great altitude above us; and to
prevent our real intentions being discovered we made the ascent
very gradually, still steering south, but on an ascending plane, so
that upon entering the cloud bank it would be apparent to all that
we were still headed for London. The elevation might be easily
accounted for on the hypothesis of air currents, so that no suspicion
of insincerity would be aroused on the part of those watching us.
"Now," said Torrence, "as we are going up to a great height, we
might find it more comfortable to slip on warmer clothing; or at all
events to get out some top coats."
This we did, and then seating ourselves on deck, watched the
great feathery mass into whose bosom we were gradually
ascending. All at once the earth, the sky, and the greater part of the
air ship vanished. We had plunged into the cloud, and I could not
even see Torry, who was sitting only a few feet away. Luckily we had
on tarpaulins, or we should have been wet to the skin. It was like
unaided flight, not even our support being visible. Torrence's voice
came out of the invisible, producing a weird sensation, and I could
feel that we were still being borne rapidly upward.
"Still ascending?" I inquired, feeling as if I were addressing
chaos.
"Still ascending!" came the answer.
"How much higher do we go?"
"Clear above this bank. It will be pleasanter."
The words had a strange unnatural sound, as if coming from
under the water. My body was the only objective reality in all
creation, and even the more distant parts of that showed a tendency
to evade me. Still onward and upward, with nothing to prove our
motion save the feeling which the vessel imparted. Suddenly a flood
of sunlight enveloped us, and we rose like a duck out of the water
into another element. A milk-white sea was spread beneath; a
dazzling sky above. Again Torrence was at his screws and levers. We
halted, and trembled for a moment in midair, preparatory to
changing our course; and then, with the rush of a sudden gale, went
swirling ahead in the opposite direction. A minute later he looked at
the register and said:
"Altitude, eight thousand two hundred. Speed, a mile a minute.
Course, northeast by north!"
And now the Hullites could amuse themselves speculating how
long it would take us to reach London, while we swept on to the
North Sea.
Our present altitude was unpleasantly cold, and the atmosphere
perceptibly rarefied, but it was not the intention to remain at such
an elevation longer than necessary, and when well beyond the
English coast we would descend to our former level. It was here that
a strange sight attracted our attention.
As the sun worn down, our milky ocean became transfused with
color. At first the change was slight, merely a rosy flush caught
against the higher points; but quickly the entire surface was
emblazoned; flooded with a million dyes of liquid fire, of a depth and
splendor that was dazzling. Such purples, greens, and violets—vivid,
intense, pale, and shadowy. It was as if we had suddenly discovered
the polychromatic sea of an unknown planet, but a sea whose
waters were strangely lacking in specific gravity and from whose
surface a myriad eddies of violet and other colored smokes arose like
incense, curling, twisting, and falling, and constantly changing tone,
shape, and density over the entire mass.
We were bewildered—dazed. While looking down upon this
marvelous panorama we were suddenly startled by a sight I shall
never forget. Far down to the east another air ship was following at
tremendous speed. Black and forbidding it plunged along through
the fiery waves, as if bent on running us down. It was the
counterpart of our own vessel. We seized each other's hands in
amazement, overcome with horror. So brilliant was the scene below
that it was an instant before we realized that the awful object was
our own phantom, or shadow, cast upon the clouds beneath; but
during that instant it was a terrifying sight.
When the sun disappeared we were left in the dull gray of
twilight, and as the cold was increasing began at once descending to
a lower level. Again the cloud drift was about us, darker and denser
than ever; but we quickly passed through it, and I was surprised on
emerging, to find the North Sea beneath, and the bluffs of
Scarborough fading in the distance.
"There is no danger of our being sighted from land now!" said
Torrence, checking our descent, and fixing the altitude at about five
hundred feet above the sea, He also reduced our speed to its former
rate, twenty-five miles an hour, which he said was fast enough. The
temperature here was warm and pleasant, with light breeze from the
southwest, which, by the by, we did not catch, as we were moving
faster, in the opposite direction, making our own wind. The sea was
deserted, and the land barely visible. It would still be some time
before dark, and we took places on deck to watch out for vessels.
We had purposely taken a course away from the track of the Wilson
steamers, which ply between Drontheim and Hull; not that it was a
matter of any vital importance, but Torrence wanted to keep our
movements from the public if possible. This was easily done, both by
reason of an extended horizon and the enormous speed we could
develop if necessary.
As darkness came on we went below, closing the shutters to all
lookouts, so as not to reveal our position, and then lighted a
swinging lamp, deriving all necessary ventilation from above,
whence no light was visible. Having thus shut ourselves in from the
observation of the world, we set about getting supper. Nothing could
be more cosy; suspended in midair, and surrounded with every
luxury, while partaking of our evening meal. The consciousness of
absolute independence of the world; the sense of power, which our
command of the situation imparted, was, to say the least, extremely
gratifying. The feudal lord in his castle might be harried and
captured by an enemy; but our enemies could be laughed at with
impunity. After supper we amused ourselves with an experiment at
dish washing, which proved very satisfactory. The plates were simply
piled into a net and lowered to the sea by a cord. After swishing
about for a while, they were drawn up clean. Of course we dropped
our level to within forty or fifty feet of the water, and greatly
slackened speed during the performance, but it saved a lot of
trouble. On completing these housekeeping arrangements we
climbed up on deck, for a chat and smoke before retiring.
The night was dark, there being no moon, and the sky overcast,
beside which the air was misty. We kept our position well above all
mast-heads, should there be any, and took extra precaution to
prevent a certain nimbus-like reflection against the mist by putting
out the lights as soon as supper was over.
Torrence touched his controller, and we rose to our former
altitude, remarking that our course only insured us against collision
with steamers; and that sailing ships were liable to be found
wherever there was water enough to float them.
"And there is no danger of dropping to a lower level unawares?"
I asked.
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  • 5. Chapter 7 Marketing Research and Sales Forecasting 147 Copyright © 2013 Nelson Education Limited CHAPTER 7 MARKETING RESEARCH, DECISION SUPPORT SYSTEMS, AND SALES FORECASTING CHAPTER OVERVIEW Collecting and managing information about what customers need and want is a challenging task for any marketer. This chapter focuses on marketing research—the process of collecting and using information for marketing decision making. It explains that data comes from a variety of sources— from well-planned studies, sales force reports, accounting records, or published reports, and from controlled experiments and computer simulations. The chapter also focuses on the impact of technology in the market research process—right from data mining, data collection, analysis of the gathered information to market research decision making and planning—which is aimed at gathering business and competitive intelligence. Chapter 7 also includes the ways market research affects promotional decisions, sales forecasts, and growth predictions. Why is research needed? Marketers use research to understand their customers, target customer segments, and develop long-term customer relationships—all keys to profitability. Information collected through marketing research underlies much of the decision making involved in market segmentation, discussed in Chapter 8. The marketing research function is the primary source of information and is clearly central to effective marketing decisions. This chapter also explains how marketing research techniques are used to make accurate sales forecasts, a critical component of marketing planning. Changes in the Third Edition The chapter has been updated and revised in several ways. New material has been added to several sections, including an expanded discussion of interpretative and ethnographic research. A number of new features are now part of Chapter 7: • The Opening Vignette and Connecting with Customers profile how loyalty or points cards are used in marketing research. This section has been updated to reflect the changes in loyalty programs since the last edition. Loyalty programs such as Air Miles track shoppers’ buying habits based on information collected from retailers. The input is anonymous, so it can be pooled into a shared, or cooperative, base that creates reports for clients without compromising the privacy of those who volunteered the information. Loyalty programs are an effective means of collecting information about shopping habits because so many Canadian participate in at least one program.
  • 6. 148 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited • Solving an Ethical Controversy looks at issues around the type of information being collected by marketers. Is the collection of sensitive information an invasion of an individual’s privacy? Does the collection of sensitive information lead to stereotyping and prejudiced behaviour or do the benefits to organizations outweigh the privacy issues? • Career Readiness provides advice on a popular and relatively inexpensive form of marketing research in “Planning Effective Online Surveys.” Online surveys give respondents anonymity, which helps most people speak more freely, and the chance to answer questions at their pace. Tips are provided on how to create successful online surveys, making sure that the marketer gets the desired results and that the respondents’ time is not wasted. • Go Green looks at how LoyaltyOne Inc., the company that introduced the Air Miles program, took the results of their research into the importance of the environment and introduced a new loyalty program. The My Planet program rewards consumers who purchase products that reduce carbon dioxide emissions and other harmful chemicals in order to conserve natural resources. • Marketing and the SME profiles the FACESofCHANGE research project. The project combined online research with more traditional research methods to uncover a deeper understanding of the relationships between media, people, and brands in the 18- to 24-year- old demographic. • Marketing in a Digital World examines the Optimum Public Relations study into whether Facebook Likes could predict elections. Starting with a study conducted in the United States, the company followed Canadian candidates from across the country during a recent election to determine if there was link between how many “likes” a candidate received and their success in the election. • Chapter Case 7.1 looks at how “Market Research Companies Scan the Globe for Marketing Data.” Two companies, NPD and Nielsen, use various techniques to research such issues as whether an increase in gas prices will affect consumer spending patterns. The results of the research projects undertaken by these companies are discussed and how these types of research projects can assist marketing decision makers. • Chapter Case 7.2 “Mapping the Market—Location-Based Marketing” discussed the advantages of using smartphone technology to collect information about where people are, when, how often and who they are with. Marketers are able to send marketing information to customers as they enter a store or restaurant. This new technology is not without some privacy issues however. If the marketers know you are not at home—then would-be thieves could as well. • Video Case Synopsis includes an overview of Ogden Publications. The video is designed to expand and highlight the concepts in this chapter and the concepts and questions covered in the written video case.
  • 7. Chapter 7 Marketing Research and Sales Forecasting 149 Copyright © 2013 Nelson Education Limited LECTURE OUTLINE Opening Vignette and Connecting with Customers—“Points Cards or Market Research.” Should data from shoppers be cross-referenced to form consumer profiles? Would you care if your purchases were used to create a massive database? Chapter Objective 1: Describe the development of the marketing research function and its major activities. Key Terms: marketing research, syndicated service, full-service research supplier, limited service research supplier Basic PowerPoint: 1,3,7 Expanded PowerPoint: 1-8 1. What is marketing research? a. Marketing research is the process of collecting and using information for marketing decision making. b. Data comes from a variety of sources, such as well-planned studies, sales force reports or accounting records, or controlled experiments and simulations. c. By presenting pertinent information in a useful format, marketing research aids decision makers in analyzing data and suggesting possible actions. d. Marketing research helps marketers in understanding customers, targeting customer segments, and developing long- term relationships. 2. The marketing research function a. The underlying purpose of marketing research is to find out more about consumers, clearly central to effective customer satisfaction and long-term relationships. b. Development of the marketing research function i. In 1879 the first organized marketing research project was organized; in the early part of the 20th century, the first commercial research department was established. ii. In the first known study, Charles Parlin counted soup cans and found that working-class families bought more canned soup than wealthy ones, convincing Campbell Soup to place ads aimed at this population. iii. Research methods became more sophisticated in the 1930s due to the development of statistical techniques. iv. Advances in computer technology have led to significant changes, including the addition of simulations that allow marketers to pose “what if” questions. c. Who conducts marketing research? i. The size and organizational form of the marketing research function are usually tied to the firm’s structure. ii. Firms organize research units by product lines, brands, geographic areas, or the type of research needed. d. Many organizations depend on independent marketing research firms due to several factors: i. Cost is often the reason for using an external firm. ii. Information collected is often more reliable and accurate
  • 8. 150 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited Go Green: Loyalty Cards Go Green. How much of an impact do you think programs like My Planet have on the environment? What other things can companies do with loyalty programs to promote environmental awareness? than what could be gathered in-house. iii. Technical assistance and expertise not available within the contracting firm can be provided. iv. Results may be more objective and unbiased since an outside firm has less tendency to set up a study just to validate a favoured theory or certain opinion. e. Classification of marketing research firms: i. Syndicated services—organizations that regularly provide standardized sets of data to all customers ii. Full-service research suppliers—organizations that contract with clients to conduct complete marketing research projects (providing qualitative and quantitative data from field studies, face-to-face and phone interviews, online surveys, as well as public opinion polls, etc.) iii. Limited-service research suppliers—firms that specialize in a limited number of activities such as conducting field interviews, testing promotional materials, or doing data processing 3. Customer satisfaction measurement programs a. Measurement programs allow marketing firms to focus on tracking the satisfaction level of a client’s current customers. b. Valuable insights can be obtained by tracking dissatisfaction that has led customers to abandon the firm’s products. c. These “customer defects” may be absolute (they leave) or partial (they remain with a product but aren’t completely satisfied). d. Some firms conduct their own measurement programs through online polls and surveys. Assessment check questions 1. Identify the different classifications of marketing research suppliers and explain how they differ from one another. Marketing research suppliers can be classified as syndicated services, which regularly send standardized data sets to all customers; full-service research suppliers, which contract to conduct complete marketing research projects; or limited-service research suppliers, which specialize in selected activities. 2. What research methods can be used to measure customer satisfaction? Some companies look at feedback from existing customers, for instance, hiring marketing research firms to collect and analyze customer feedback at their websites. Other firms collect feedback about customer defections—why a customer no longer uses a product. Other organizations conduct research through online polls and surveys. Chapter Objective 2: Explain the steps in the marketing research process. Key Terms: exploratory research, sales analysis, hypothesis Basic PowerPoint: 9 Expanded PowerPoint: 9-14
  • 9. Chapter 7 Marketing Research and Sales Forecasting 151 Copyright © 2013 Nelson Education Limited Figure 7.1 The Marketing Research Process. Which steps, if any, might be conducted by the firm in-house? Which might be better left to an outside marketing firm? 1. The marketing research process a. The chances of making good decisions improve when the right information is provided at the right time during decision making. b. To meet this goal, researchers often follow six steps in the marketing research process: i. Define the problem ii. Conduct exploratory research iii. Formulate a hypothesis iv. Create a research design v. Collect data (primary and secondary) vi. Interpret and present the research information 2. Define the problem a. A well-defined problem is half solved, because it permits the researcher to focus on securing the exact information needed for the solution. b. It is important not to confuse symptoms of the problem with the problem itself. i. A symptom merely alerts a marketer that a problem exists. ii. To identify the problem itself, marketers need to look for the underlying causes of the symptom. iii. To do this, a starting point might be to evaluate the firm’s target market and marketing mix element. 3. Conduct exploratory research a. Exploratory research looks for causes of a problem by discussing it with informed sources (both within and outside the firm) and by examining data from other sources. i. This includes speaking with employees as well as evaluating company records, sales and profit analyses, and competitive data. ii. This internal data collection is often referred to as situation analysis. iii. Exploratory interviews with informed persons outside the firm are referred to as informal investigation. b. Using internal data i. Marketers can find valuable data in their firm’s own internal records such as sales records, financial statements, and marketing cost analyses. ii. Sales analysis compares actual and expected sales based on forecasts, often using sales quotas to look at expected and actual results. iii. Other breakdowns divide transactions by customer type, product, sales method, or order size. iv. Sales analysis is one of the least expensive and most important sources of marketing information. v. Accounting data, often summarized in financial
  • 10. 152 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited statements, can be used to compare current and previous years against industry benchmarks. vi. Marketing cost analysis is the evaluation of expenses for tasks such as selling, warehousing, advertising, and delivery to determine profitability. vii. These forms of internal data are most .useful when they provide information linked to other forms of marketing research. 4. Formulate a hypothesis a. A hypothesis is a tentative explanation for some specific event. b. It is a statement about the relationship among variables that carries clear implications for testing this relationship. c. It sets the stage for in-depth research by clarifying what researchers need to test. d. While not all studies test specific hypotheses, a carefully designed study can benefit from a clear hypothesis set up before beginning data collection. 5. Create a research design a. A research design is a master plan or model for conducting marketing research. b. It helps clarify for marketers that the study will measure what they want it to measure. c. It also allows for the selection of the respondents, or sample, to be studied. Assessment check questions 1. What are the six steps in the marketing research process? The marketing research process can be divided into six specific steps: (1) defining the problem, (2) conducting exploratory research, (3) formulating a hypothesis, (4) creating a research design, (5) collecting data, and (6) interpreting and presenting research information. 2. What is the goal of exploratory research? Exploratory research seeks to discover the cause of a specific problem by discussing the problem with informed sources within and outside the firm and examining data from other sources. Chapter Objective 3: Distinguish between primary and secondary data and identify the sources of each type. Key Terms: secondary data, primary data Basic PowerPoint: 15 Expanded PowerPoint: 15-17 1. Collect data a. Marketing research gathers two kinds of data—secondary and primary. b. Secondary data is information from previously published or compiled sources (such as Census data).
  • 11. Chapter 7 Marketing Research and Sales Forecasting 153 Copyright © 2013 Nelson Education Limited Solving An Ethical Controversy – What Kind of Information Should Marketers Collect? Are there other types of data that students feel researchers should not be collecting? What impact will privacy of information laws have on collecting of sensitive data? Note: If you were asked to research trends in the Canadian population over the past five decades, which sources would you use? c. Primary data is information collected for the first time specifically for a marketing research study. d. Secondary data offers two big advantages: i. It is less expensive to gather. ii. It takes less time to locate and use the data. e. Secondary data also has limitations: i. Published data can quickly become obsolete. ii. Data collected for an unrelated purpose may not be completely relevant to the marketer’s specific needs. f. Primary data costs more and takes longer to gather, but often results in richer, more detailed information than secondary data. g. The choice between secondary data and primary data is usually tied to cost, applicability, and effectiveness; many marketing studies use both types. 2. Interpret and present research information a. The final step is to interpret the findings and present them to decision makers in a format that allows management to make effective judgments. b. Differences in interpretation can arise due to differing backgrounds, levels of knowledge, or experience. c. Oral and written reports should be used to minimize this misinterpretation of data. d. Researchers and users must be determined to cooperate at every stage and communicate directly. e. Studies may go unused because management thinks the results are of little use or hard to understand. f. Marketers should clearly spell out conclusions, avoid overly technical language, and present results to all concerned at the same time if possible. g. Decision makers can then quickly reach consensus on what the results mean and what actions need to be taken. 3. Marketing research methods a. Data collection is clearly an integral part of the process—without it there would be no research. b. A time-consuming task is determining which method to use to obtain data, usually either secondary or primary data collection. 4. Secondary data collection a. Most secondary data is available for little or no cost. b. The challenge is selecting from a wealth of sources only that data which is relevant to the issue being studied. c. Secondary data consists of two types: i. Internal data includes sales records and activity reports, product performance reviews, sales force activity reports and marketing cost reports. ii. External data comes from government records, syndicated research services, and industry publications. 5. Government data a. The federal government is the nation’s most important source of
  • 12. 154 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited marketing data and Census data represents the most frequently used government statistics. b. Statistics Canada polls the population every five years and provides results to the public for free. c. It also conducts periodic surveys of housing, population, business, manufacturing, agriculture, mining, and governments. d. Statistics Canada offers vast information broken down by small geographic areas. e. Beyond federal sources, data is also provided by Province and city governments. 6. Private data a. Many organizations offer data through their own channels i. Business and trade associations often offer data through their publications. ii. Encyclopedia of Associations, available in many libraries, lists trade associations. iii. The advertising industry continually publishes data on various audiences. iv. Guide to International Periodicals lists trade publications that publish industry-specific research. b. Regardless of source, data security and public use of private information is always an issue. c. Data from trade journals can be gathered directly from the publishers or through online periodical databases at libraries such as ProQuest Direct’s ABI/Inform. d. Electronic systems that scan UPC bar codes also collect data for inventory control, ordering, and delivery. e. Radio-frequency identification technology (RFID) is new technology that tracks individual purchases but involves major privacy concerns, so it’s currently used for aggregate data only. f. ACNielsen SalesNet offers scanner information from grocery stores in commercially available databases. 7. Online sources of secondary data a. Hundreds of databases and other sources of information are available online i. Internet-based marketing research projects may cost less and yield faster results than traditional research. ii. The Internet has led to a growth in research aggregators—companies that acquire, catalog, reformat, segment, and then resell already-published premium research reports. iii. Social networking sites yield valuable marketing information. iv. Google Analytics is a business tool for measuring online sales, tracking e-mail and ad campaigns, and benchmarking key measures against competitors. It
  • 13. Chapter 7 Marketing Research and Sales Forecasting 155 Copyright © 2013 Nelson Education Limited helps companies target online ads to people who might be interested in them. v. Researchers must evaluate the validity of the information they find on the Internet. The phrase caveat emptor (“let the buyer beware”) should guide evaluation of secondary data on the Internet. Assessment check questions 1. Distinguish between primary and secondary data. Primary data are original; secondary data have been previously published. 2. What are the major methods of collecting secondary data? Sources of internal data include sales records, product evaluations, sales force reports, and records of marketing costs. Chapter Objective 4: Explain the different sampling techniques used by marketing researchers and identify the methods by which marketing researchers collect primary data. Key Terms: sampling, population, probability sample, nonprobability sample, interpretative research, mall intercepts, focus groups, controlled experiment, test-market Basic PowerPoint: 18,19,22-24 Expanded PowerPoint: 18-24 1. Sampling techniques a. Sampling is the process of selecting survey respondents or research participants. b. It is one of the most important aspects of research design because if a study uses a sample different from a target market, the results will be misleading. c. A population or universe is the total group of people the researcher wants to study. d. Unless it’s very small, data is rarely gathered from an entire population, resulting in a census, due to high costs. e. Instead they work with a sample, a representative group chosen from this population and classified as either probability or nonprobability types. 2. Probability sample a. A probability sample gives every member of the population a chance of being selected. b. Types of probability samples: i. Simple random sample—every member of the relevant universe has an equal opportunity of selection. ii. Stratified sample—randomly selected subsamples of different groups represented in the total sample. iii. Cluster sample—researchers select areas (or clusters) from which they draw respondents. 3. Non-probability sample a. A nonprobability sample relies on personal judgment in the selection process as researchers decide what groups to study.
  • 14. 156 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited Note: Have you ever been involved in taking a survey? Did you face any difficulties? Did it affect the accuracy and validity of the result? Figure 7.2 Types of Primary Research. Which type is the most subjective? The most objective? What are the advantages of each type? b. Types of nonprobability samples: i. Convenience sample—a group selected from readily available respondents, also called an “accidental sample” because those included just happened to be in the place where the survey was conducted. ii. Quota sample—A list of needed types of respondents, divided to maintain representations for different segments or groups as seen in the entire population. 4. Primary research methods a. Marketers use a variety of methods for conducting primary research, including observation, surveys, and controlled experiments. b. The choice of method depends on the issues under study and the decisions that marketers need to make, so at times researchers combine techniques during the process. 5. Observation method a. In observational studies, researchers view the overt actions of the subjects studied, trying to understand how consumers behave in certain situations. b. Technological advances provide increasingly sophisticated ways for observing consumer behaviour, such as electronic people meters used by the TV industry to monitor viewing habits. c. Marketers worry that consumers don’t use these devices correctly, so additional technology such as a portable people meter (PPM) has been invented to check their actual habits versus what they enter. d. Due to TiVo and other digital recording devices, Nielsen Media Research now releases findings on viewing habits in three versions: live, live plus 24 hours, and live plus seven days. e. Other observational techniques include videotaping consumers in action, conducting focus groups, and asking consumer panels to responding to certain queries in person or online. f. Interpretative research—Ethnographic Studies i. Interpretative research is a method in which a researcher observes a customer or group of customers in a natural setting. ii. The behaviour is interpreted based on an understanding of the social and cultural characteristics of that setting. 6. Interpretative research—Ethnographic Studies a. Interpretative research is an observational method developed by social anthropologists to explain behaviour that operates below conscious thought. b. It provides insights into consumer behaviour and the ways in which consumers interact with brands. c. It’s conducted by observing customers in their natural setting, then interpreting their behaviour based on social and cultural characteristics of that setting.
  • 15. Chapter 7 Marketing Research and Sales Forecasting 157 Copyright © 2013 Nelson Education Limited Marketing and the SME: FACESofCHANGE. Do you think the FACESofCHANGE research was an effective way to reach the 18- to 24-year-old consumer? Why or why not? Are there other research methods that may be more effective? i. It’s sometimes referred to as ethnography, because the researcher spends an extensive amount of time studying the culture (“ethnographic” means a researcher takes a cultural perspective on the population studied). ii. For that reason, interpretative research is used domestically to look at consumer behaviour in a foreign country, where language, ideals, values, and expectations are subject to different influences. d. Interpretative research focuses on understanding the meaning of a product or the consumption experience in a consumer’s life. e. It captures what they actually do, not what they say they do. f. This research takes time and money, so it’s only used when a firm wants a detailed look at how consumers use its products. 7. Survey method a. Observation cannot supply all of the desired information, so researchers must ask questions to get information on attitudes, motives, and opinions. b. Observation doesn’t obtain exact demographic information—to get that, researchers use interviews or questionnaires. c. Telephone interviews i. Telephone interviews are a quick and inexpensive method for obtaining a small quantity of relatively impersonal information. ii. Simple, clearly worded questions are easy for interviewers to pose over the phone and are effective in drawing appropriate responses. iii. Telephone surveys have relatively high response rates, particularly with repeated calling, and some firms use computerized random dialing to speed up the process. iv. However, phone surveys have drawbacks: people refuse to do them due to the time needed, the nuisance factor, negative associations with telemarketing, or poorly designed surveys. v. Also, results may be biased by the omission of certain households or those with unlisted numbers. vi. Caller ID and other electronic devices are designed to block calls and act as obstacles to phone surveys. vii. Consumers are increasingly concerned about privacy issues and information given over the phone. viii. Phone surveys can be useless abroad in areas where telephone ownership is rare, directories are lacking, or charges are made when accepting calls; results in these cases will be highly biased. d. Personal interviews i. Personal interviews are the best method for obtaining detailed information about consumers, as the interviewer can establish rapport and explain confusing or vague questions.
  • 16. 158 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited Career Readiness— Planning Effective Online Surveys. Think of a time you came across an online survey. Did you have any concerns? Did you participate? ii. Drawbacks: they can be time-consuming and expensive. iii. They may be conducted in homes but also at locations allowing private interviewing space, often in shopping centers in the form of mall intercepts. e. Focus groups i. A focus group brings together individuals in one location to discuss a subject for an hour or two with a moderator to stimulate conversation and encourage interaction. ii. Focus groups encourage discussion rather than using a question-and-answer format. iii. They are a quick and inexpensive method of gaining insight into consumer attitudes and motivations. iv. In a focus group, the leader, or moderator, typically suggests an opening topic. The moderator’s purpose is to stimulate interaction among group members. It is a difficult job that requires preparation and group facilitation skills. v. They are a valuable tool for exploratory research, developing new product ideas, and preliminary testing of alternative marketing strategies, and can help to design questionnaires for a larger study. vi. Drawbacks of focus groups: people may be dishonest or affected by peer opinions, the environment may be sterile and unnatural, and the small size may not be representative of the larger population. vii. Online focus groups can be more cost- and time- efficient than traditional formats, have better attendance, and are less affected by peer pressure. viii. Drawbacks of online formats: lack of access to body language or nonverbal cues, difficulty in testing products, tendency toward non-representative samples f. Mail surveys i. Mail surveys are a cost-effective alternative, providing anonymity that may encourage respondents to give candid answers. ii. They can help marketers track consumer attitudes through ongoing research and may provide needed demographic information. iii. Drawbacks: low response rate, slow response time, complexity of the questions, no way to respond to concerns, and the possibility of bias. iv. Mail surveys do better if questionnaires are very short and an incentive is offered. g. Online surveys and other Internet-based methods. i. Using the Web allows researchers to speed the survey process, increase sample sizes, ignore geographic boundaries, and dramatically reduce costs. ii. Online surveys are less intrusive than phone surveys, allowing respondents to take part at their convenience.
  • 17. Chapter 7 Marketing Research and Sales Forecasting 159 Copyright © 2013 Nelson Education Limited Marketing in a Digital World: Can Facebook Likes Predict Election? How effective do you think this type research would be in predicting marketing and promotional campaigns on Facebook? Support your answer. iii. They’re often considered novel and easy to do, leading to higher response rates and becoming a popular and cost-effective way to sample customer feedback. iv. Businesses often include questionnaires on their websites to solicit information about consumer demographics, attitudes, and their suggestions for improving the product or the marketing message. v. Online polling is also increasing in popularity. vi. There is no industry standard to measure website use, while marketers try counting hits, tracking with cookies (now unpopular), or asking visitors to register. vii. Observing consumers online offers marketers the opportunity to monitor the buying decision process, understand what turns a browser into a buyer, see how shoppers compare product features, and grasp the relative impacts on purchase decisions of marketing and price. 8. Experimental method a. The least-used method for collecting primary data is the controlled experiment. i. This is a scientific investigation in which a researcher manipulates a test group and compares the results with those of a control group that did not receive the experimental manipulation. ii. The most common use of this method by marketers is test marketing, or introducing a new product and then observing its degree of success. iii. Test marketing may follow periods of information gathering or focus groups, so it would be the first stage at which a product performs in a real-life environment. iv. Some firms omit test marketing and go directly from product development to full-scale production. b. Some drawbacks of test marketing: i. It is an expensive and labour-intensive operation. ii. Some products aren’t suited to test marketing. iii. Competitors quickly learn about the new product and can develop competitive strategies. iv. Few firms test market long-lived, durable goods—such as appliances and automobiles—because of the major financial investments required for their development. c. Alternatives to test marketing: i. Firms that skip test marketing can simulate a campaign through computer-modeling software. ii. They might offer an item in just one region or country, then adjust promotions and advertising based on local results before expanding to other locations. iii. Similarly, they might limit a product’s introduction to only one retail chain, then monitor results closely.
  • 18. 160 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited Assessment check questions 1. What is sampling? Sampling is the process of selecting representative survey respondents or research participants from the total universe of possible participants. 2. What are the different types of probability and nonprobability samples? Types of probability samples include simple random samples, stratified samples, and cluster samples. Nonprobability samples are convenience samples and quota samples. 3. What are the major methods of collecting primary data? Three principal methods of primary data collection are observation, survey and interview, and experimentation. 4. Identify the different types of survey methods. Different survey methods may include telephone interviews, personal interviews, focus groups, mail surveys, and online or other Internet-based methods. 5. How is interpretative research typically conducted and when should ethnographic research be used? Interpretative research observes a customer or group of customers in their natural setting and interprets their behaviour based on social and cultural characteristics of that setting. Ethnographic research is used to look at the consumer behaviour of different groups of people. Chapter Objective 5: Explain the challenges of conducting marketing research in global markets and outline the most important uses of computer technology in marketing research. Key Terms: marketing information system (MIS), marketing decision support system (MDSS), data mining Basic PowerPoint: 25, 26, 29-31 Expanded PowerPoint: 25-31 1. Conducting international marketing research a. Though the steps are similar, new challenges arise when gathering information about consumers in foreign markets. b. Canadian firms can tap many secondary resources when researching global markets, particularly through the government. i. Industry Canada and U.S. Department of Commerce are good sources of Information. 2. Challenges of conducting international marketing research: a. Language issues—communicating the message in the most effective way b. Cultural issues—capturing local citizens’ interests while avoiding missteps that could unintentionally offend them c. Business environment—political and economic conditions, potential for growth, and trade regulations that affect research studies and data collection d. Some adjustment in the collection of data for primary research may be necessary. i. Some methods do not easily transfer across national boundaries. ii. Face-to-face interviewing is the most common method used outside North America.
  • 19. Chapter 7 Marketing Research and Sales Forecasting 161 Copyright © 2013 Nelson Education Limited iii. Mail surveys are usable only in developed countries, otherwise they’re useless due to low literacy rates, unreliable mail service, and lack of address lists. iv. Telephone surveys may not be suitable in areas where service is limited or phone ownership is rare. v. Focus groups may be difficult to arrange due to social and cultural issues. e. Some firms tap local researchers or those experienced in global studies to investigate foreign markets. 3. Computer technology in marketing research a. The ability to quickly gather and analyze business intelligence can create a substantial strategic advantage. b. Computer databases, whether internal or maintained outside the firm, can be designed to gather facts about a firm’s consumers. c. Computer technology assists with the marketing information system (MIS), marketing decision support system (MDSS), data mining, business intelligence, and competitive intelligence. 4. Marketing information system (MIS) a. Managers used to complain there was too much data to sort through, data was irrelevant, or information was impossible to find. b. A marketing information system (MIS) is a planned computer- based system that provides decision makers with a continuous flow of information relevant to their areas of responsibility. c. A well-constructed marketing information system serves as a nerve center, continually monitoring both internal and external market environments and providing instantaneous information. d. Marketers are able to store the data for later use, classify and analyze that data, and retrieve it easily when needed. 5. Marketing decision support system (MDSS) a. A marketing decision support system (MDSS) consists of software that helps users quickly obtain and apply information as a foundation for decision making. b. It allows managers to connect such diverse information as the state of the market, consumer behaviour, sales forecasts, actions of competitors, and environmental changes. c. MDSS has four major characteristics: it is interactive, investigative, flexible, and accessible. d. It can create simulations or models to illustrate the likely results of changes in marketing strategies or market conditions. e. While the MIS provides raw data, the MDSS develops that data into useful information. 6. Data mining a. Data mining is the process of searching customer files to detect patterns, identifying relationships not obvious to marketers, and in a sense answering questions that haven’t yet been asked. b. Data mining is a way to sort through huge amounts of data stored in a data warehouse and make sense of it, find patterns, and use that intelligence to review effectiveness of strategies.
  • 20. 162 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited c. It helps marketers create customer profiles, pinpoint reasons for customer loyalty (or lack of loyalty), analyze the potential returns on price and promotion changes, and forecast sales. 7. Business intelligence a. Business intelligence is the process of gathering and analyzing information to improve strategies, tactics, and daily operations. b. It can report on a firm’s sales operation or focus on finding information about competitors. c. The key is collecting precise information and getting it into a format that managers can understand and use. 8. Competitive intelligence a. Competitive intelligence is a form of business intelligence that focuses on finding information about competitors. b. It uses published sources, interviews, observations, government agencies, public filings, and other secondary sources including information found on Internet sites. c. The aim is to uncover the specific advantages of competitors. d. Marketers use the results to make better decisions that strengthen their own competitive advantage. Assessment check questions 1. What are some organizations that can serve as sources of international secondary marketing data? Industry Canada and the U.S. Department of Commerce offer reports and guides for many countries. 2. Distinguish between an MIS and an MDSS. A marketing information system (MIS) is a planned computer-based system designed to provide managers with a continuous flow of information relevant to their specific decision-making needs and areas of responsibility. A marketing decision support system (MDSS) is a marketing information system component that links a decision maker with relevant databases and analysis tools to help ask “what if” questions. 3. What is data mining? Data mining is the process of searching through huge consumer information files or data warehouses to detect patterns that can help marketers ask the right questions and guide marketing decision making. 4. Describe the process of collecting business and competitive intelligence. Business intelligence is the process of gathering information and analyzing it to improve business strategy, tactics, and daily operation. Competitive intelligence focuses on finding information about competitors using published sources, interviews, observations by salespeople and suppliers in the industry, government agencies, public filings such as patent applications, and other secondary methods including the Internet. Chapter Objective 6: Identify the major types of forecasting methods. Key Terms: sales forecast, qualitative forecasting, quantitative forecasting, jury of executive
  • 21. Chapter 7 Marketing Research and Sales Forecasting 163 Copyright © 2013 Nelson Education Limited opinion, Delphi technique, survey of buyer intentions, trend analysis, sales force composite, exponential smoothing Basic PowerPoint: 32-34 Expanded PowerPoint: 32-35 Table 7.1 Benefits and Limitations of Various Forecasting Techniques, Which techniques would be best for a firm with a limited budget? For a firm with a time crunch? For a firm willing to pay for detailed and realistic information? 1. Sales forecasting a. A sales forecast is an estimate of a firm’s revenue for a specified future period. b. Forecasts play major roles in new-product development, production scheduling, financial planning, inventory planning and procurement, distribution, and human resource planning. c. An inaccurate forecast can lead to poor or incorrect decisions in these areas. d. Marketing research techniques are used to create and deliver effective sales forecasts. e. A forecast sets standards against which to measure actual performance; without standards, no comparisons can be made. f. A short-run forecast covers up to one year, an intermediate forecast covers one to five years, and a long-run forecast extends beyond five years. g. Types of sales forecasting methods: i. Qualitative forecasts—techniques that rely on subjective data rather than exact historical data ii. Quantitative forecasts—techniques that rely on statistical computations iii. Each method has benefits and limitations; most firms rely on a combination of the two 2. Qualitative forecasting techniques a. Planners use qualitative forecasting techniques when they want judgmental or subjective indicators. b. Qualitative forecasting techniques include jury of executive opinion, Delphi technique, sales force composite, and survey of buyer intentions. c. Jury of executive opinion i. The jury of executive opinion technique combines and averages the outlooks of top executives from each of the functional areas of the firm. ii. It’s a quick and inexpensive method that often generates good forecasts for sales and new-product development. iii. It works best for short-term forecasting. d. Delphi technique i. The Delphi technique solicits opinions from several people, but also gathers thoughts from experts outside the firm, such as academic researchers. ii. It is most appropriately used to predict long-run issues, such as technological breakthroughs, that could affect future sales. iii. A firm selects a panel of experts and sends each a questionnaire, combines and averages answers, develops another questionnaire based on the results,
  • 22. 164 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited and sends it back to the same people. iv. The process continues until it identifies a consensus, so the Delphi technique is expensive and time-consuming. e. Sales force composite i. The sales force composite technique develops forecasts based on the belief that organization members closest to the marketplace offer the best insights concerning short-term future sales. ii. These forecasts typically work from the bottom up. iii. Drawbacks: forecasts are conservative because their numbers ultimately determine sales quotas, or they’re based on a narrow perspective or geographic territory. iv. This method works well only in combination with other techniques. f. Survey of buyer intentions i. A survey of buyer intentions gathers input from various sources to determine the purchasing intentions of a representative group of present and potential customers. ii. It’s impractical for firms with millions of customers but works well for those with a limited number of customers. iii. Drawbacks: intentions are just that, intentions, and may not translate into actual sales. iv. Buyer surveys produce useful information only if consumers reveal their true thoughts and feelings. v. This is also a time-consuming and expensive process. 3. Quantitative forecasting techniques a. Test Markets i. Test markets gauge and assess consumer response to a new product under actual marketplace conditions. ii. Different prices, alternative promotion strategies, and other marketing mix variations can be evaluated. iii. The big advantage is that they provide realism. iv. Drawbacks: they’re expensive and time-consuming experiments that may unwittingly signal marketing plans to competitors. b. Trend analysis i. Trend analysis develops sales forecasts by analyzing the historical relationship between sales and time. ii. It implicitly assumes that the collective causes of past sales will continue to exert similar influence in the future. iii. When historical data is available, trend analysis is a relatively inexpensive technique. iv. Drawbacks: It can’t be used without historical data, (such as for new-product forecasting) and the quality of the forecast is only as good as the data available. v. It makes the dangerous assumption that future events will continue in the same manner they have in the past.
  • 23. Chapter 7 Marketing Research and Sales Forecasting 165 Copyright © 2013 Nelson Education Limited vi. But it does give reliable forecasts during periods of steady growth and stable demand. c. Exponential smoothing i. Exponential smoothing is a sophisticated version of trend analysis, weighing each year’s sales data and giving greater weight to results from most recent years. ii. It’s considered to be the most commonly used quantitative forecasting technique. Assessment check questions 1. Describe the jury of executive opinion. The jury of executive opinion combines and averages the outlooks of top executives from areas such as marketing, finance, production, and purchasing. 2. What is the Delphi technique? The Delphi technique solicits opinions from several people but also includes input from experts outside the firm, such as academic researchers. 3. How does the exponential smoothing technique forecast sales? Exponential smoothing weighs each year’s sales data, giving greater weight to results from the most recent years. Projects and Teamwork Exercises 1. Nielsen offers data collected by optical scanners from the United Kingdom, France, Germany, Belgium, the Netherlands, Austria, Italy, and Finland. This scanner data tracks sales of UPC-coded products in those nations. In small teams, imagine that you are one of Nielsen’s clients. One team might be a retail chain, another an Internet company, and still another a toy manufacturer. Discuss the types of marketing questions these data might help you answer. Share your list with other teams. Start a discussion on ACNielsen and the ways in which it collects data via optical scanners from the United Kingdom, France, Germany, Belgium, the Netherlands, Austria, Italy, and Finland. Ask students to explain how this scanner might track sales of UPC-coded products in those nations. Then have teams (representing retail chains, Internet companies, and toy manufacturers) talk about the types of marketing questions that this data might help answer. Have students write down the questions that come to mind and then share them with the class. 2. Discuss some of the challenges Pizza Hut might face in conducting marketing research in potential new international markets. What types of research would you recommend the company use in choosing new countries for expansion? Have students talk about the challenges Pizza Hut may be facing in conducting marketing research on the potential new international markets. When a country wants to expand into foreign nations, what kind of information does it need? What types of research would provide it? 3. Working alone or with a partner, choose a new product idea, or a variation on an existing product, that you think will appeal to your classmates, such as yogurt or an energy drink in new flavour, and devise a test-marketing plan for it. Determine where you will test your product and
  • 24. 166 Part 3 Target Market Selection Copyright © 2013 Nelson Education Limited which variables you will assess, such as price and promotion activities. Be prepared to present your plan to the class and include a description of the information you hope your test market will provide. Have students select a product that is new, or modified. Existing products are to be avoided in this exercise. Students must select the appropriate, relevant variables, and suggest plans to test market the product. There are many ways to do test marketing, such as showing it to potential buyers, creating a blog or a website, determining the correct prices, asking a buyer, comparing product with others, and taking it to a trade show. They should present their ideas, as well as the expected responses. 4. Interpretative research offers marketing researchers many possibilities, including the opportunity to improve product features such as packaging for food or over-the-counter medication that is difficult for seniors or people with disabilities to open. List some other ways in which you think this observation method can help make existing product offerings more appealing or more useful to specific kinds of users. What kind of products would you choose, and how would you test them? Have students share their lists of the ways in which the observational method works to make existing products appear more appealing or useful. Have them explain how interpretative research can be used to explore product features such as packaging for food or over-the-counter medication that is difficult for seniors or the disabled to open. What kind of products did they choose? How would they test them? Start a discussion on the ways in which interpretative research can be used, and the situations in which it might not be the best choice. 5. McDonald’s conducts extensive marketing research for all its new products, including new menu items for its overseas stores. Due to cultural and other differences and preferences, the company cannot often extrapolate its results from one country to another. For instance, Croque McDo fried ham and-cheese sandwiches are unlikely to be as popular in North America as they are in France, which invented the croquet monsieur sandwich on which McDonald’s product is based. Can you think of any other kinds of firms that share this limitation on global applications of their research? In contrast, what sorts of questions could multinational firms answer on a global basis? Why? Start a discussion on this broad topic. As McDonald’s conducts extensive marketing research for its new products, it must take into account differences in cultures, tastes, and preferences. But it can’t also use results of one study for its marketing in another country. What other industries or broad business areas did students think of that are also limited in this way on a global basis. How can their global research be improved? And what questions could multinational firms answer? Continue the discussion by having students suggest names of well-known companies and their products that might have trouble transferring their product from one nation to another. Critical-Thinking Exercises 1. Some companies are broadening their markets by updating classic products to appeal to younger people’s tastes and preferences. What primary and secondary market information would you want to have if you were planning to reinvigorate an established brand in each of the following categories? Where and how would you obtain the information? a. household cleaner b. moist packaged cat food c. spray starch
  • 25. Another Random Scribd Document with Unrelated Content
  • 26. We crept slowly forward among legs and arms. A dozen men were snoring around us, and one fellow turned over, muttering something in his sleep, as my boot brushed against his shoulder. The ladder was gained. We climbed up the side of the great machine without a sound, and took our places within, as best we could in the darkness. Again Torry's mouth was at my ear. "I must wait a minute," he said, "until my eyes become accustomed to the light. As soon as I can see the outlines a little better we are off!" The silence was only broken by the breathing of the sleeping men around us. I was in an agony of suspense fearing there would be some hitch at the last—something wrong about the machine which might prevent its rising. The time seemed eternal. But the great open end of the barn was growing in clearness of outline. The fog was friendly; but the dawn was approaching. Again my brother's hand was upon my shoulder. "Now brace yourself!" he said; "we are going!" The air ship trembled. It was a sensation never experienced before. The vibrations seemed to pass through the innermost fibers of my being. I felt that we were being lifted in the air, and then that we were slowly floating out at the open end of the barn. There was a shout and a curse and a call to arms. Noiseless as our movements had been, the men were aroused, and in an instant a score of voices were calling and yelling in every direction: "Stop thief! Surround the barn! Where are they?" A hideous medley of curses, groans, and sounds of fighting rose through the darkness from every quarter of the field; but the air ship
  • 27. was far above, and hidden from eight in the dense gloom of the morning fog. "Let them fight it out among themselves," said Torrence, drawing a long sigh of relief; "we shall never see them again!" We rose steadily and slowly for several minutes, Torrence saying it would be necessary to be well above the houses, as we were going to pass directly over London and must take no risk of a collision in the darkness. Presently I could feel that we were sweeping ahead. The movement was perfect, and as we sped rapidly forward through the dense atmosphere, catching an occasional glint of a street lamp below, all sense of fear departed. The trembling had ceased; and I felt as though we were floating rapidly away on the breast of a cloud, or upon, the back of some monstrous bird; only here there was no effort. It was the only element comprehended. I could imagine nothing more sublime, more exhilarating. It was the absolutely finished poetry of flight. Beyond this, there was a feeling of safety far surpassing that of earthly locomotion, possibly due to the knowledge that we were lifted clear above all obstacles; that no uncertain switch, or ill-timed train could affect us. On we swept, in an ecstasy of rapture, realizing neither our speed nor place, engrossed only with the novelty of our situation, and watching the coming dawn. Suddenly a great, dazzling object not twenty yards away flashed past us. "Great God!" exclaimed Torrence, rising, "I thought I was too high for that." "What was it?" I asked in amazement. "The cross on top of St. Paul's!"
  • 28. We had narrowly missed it, and caught sight of it, just as it reflected the first rays of the rising sun, in a rift of the fog, and just as I was congratulating myself upon being above every earthly object. But it was a clear miss and no harm done. Presently the fog cleared and we looked down upon the great city of London speeding away below. "And where are we going, old man?" I inquired at last, hardly able to contain myself with the strange delight of this new sensation of flying. "To the North Pole!" said Torrence, holding fast to his levers, screws, and steering apparatus. IX. With the rising of the sun the fog cleared, and the great city of London was spread out away beneath us. It was a sight I can never forget, and a sensation unequalled by any previous experience. Patches of smoke blocked out large areas of the metropolis, but there was promise of a day of rare, Spring-like beauty. As we floated aloft, above the smoke and grime, through an atmosphere of translucent purity, we watched with interest the shifting masses beneath, and drank in with delight the marvelous scene. On and on we flew, at one moment unscreened from the streets and houses of the city, at, the next catching only occasional glimpses of a tower or steeple piercing an earthward cloud, like the finger of a submarine monster pointing heavenward. But far to the north the smoke had
  • 29. vanished, and the green fields of Spring would soon be under us. It was a dream of bliss, transcending the power of words to picture, or the imagination of man to conceive. "It makes me shudder," said Torrence, "to think of what a narrow escape we had just now. A few feet more to the left and we would have banged into St. Paul's cross!" I admitted that it would have been an ugly collision. "The truth is," he continued, "I miscalculated our height; and in the fog and darkness, we may have had some other close shaves, for all I know." "Hardly," I answered; "the houses in London are not high, as a rule." "There are the Queen Anne flats at Victoria station," observed Torrence. "True; but surely we did not go as far to the west as that?" "Indeed we did. I ran considerably out of our course intentionally. You see I wanted to take in London by daylight; and wouldn't have missed the sight for a barrel of money. I ran slow, as well as indirectly, or we would have been well out of Middlesex by now. But I really thought we were higher, and should have consulted the barometer; but in getting away from those hounds I never thought of it. But thank God we're all right now. How do you like the air ship?" "It's the grandest thing on the earth or off of it!" I answered; "but you haven't told me why those fellows wanted us; and why we had to sneak out of the hotel like thieves." "There's lots of time for that," he answered; "but let us not miss this sight while we have it."
  • 30. And I did not want to miss it myself, but before we had quite passed the suburbs Torrence explained as follows: "You remember Hart?" he began. "Perfectly; you mean Wetherbee's partner; the fellow we had our first interview with." "Yes. Well, do you know that when the scoundrel discovered that we were building the machine without his aid, and that we were becoming the talk of London for our wealth, and manner of living, he was consumed with envy, and fearing that he had lost a good thing, got out an injunction against our moving the vessel, on the ground of being Wetherbee's partner? Of course he totally misrepresented the facts, and——" "Then you did violate the law after all!" I exclaimed, feeling that I had been deceived. "Not in the least!" he answered; "the paper was never served; I took care that it shouldn't be. But there were men in waiting at the entrance to the Mustapha, who confidently expected to catch me as I passed in or out, and if I had not come by a private entrance and left as we did, we should be down there now, and perhaps for a year to come, waiting the settlement of a legal investigation. Now, I knew if I stopped to explain matters to you, we might not get off. You would naturally argue the point, and the precious time be lost. I was warned of this pending injunction by one of the gentlemen I introduced you to in the billiard room, who certainly did me a very decent turn in return for my favors in the money line. The fellow found it out quite accidentally, but he didn't forget me." I was amazed, and greatly relieved to find so simple an explanation of what, but a few hours before had a painfully criminal
  • 31. aspect. If Torrence could explain the mystery of his sudden wealth as satisfactorily I should be more than gratified; and this I suggested to him. "My dear boy," he answered, "every penny I have spent will be as satisfactorily accounted for as being my own legitimate money as what I have just told you. I have never committed an illegal or dishonorable act in its acquirement, and when the time comes to explain, I will do it; but not yet." He touched a button on his left, and I was conscious of slightly increased speed. The green fields were now beneath us, and the few clouds that hovered above only kept the sun from being too warm. The motion of the most perfect boat, gliding before an imperceptible breeze, would be barbarous compared with ours. Our vessel was loaded with every luxury, including such clothing as we should need in the latitudes we proposed to visit. And not only were there suits for cold weather but for warm as well, we having left our trunks at the Mustapha. Furs and eider-downs were here galore, beside every contrivance for Arctic comfort. Beyond these, we had abundance of fire-arms, and ammunition. Our sleeping apartments were luxurious. They were situated forward, with a comfortable bed in each, and separated by a curtain with rings which slid upon a brass rod, running parallel with the length. Our cooking arrangements were astern, and immediately before them our dining room or saloon—a cosy little apartment with sliding windows, which could be opened to admit the purest air in the world. Indeed the ventilation had been admirably planned, and nowhere, or in any kind of weather need we suffer from a fetid
  • 32. atmosphere. In the center, but below the main deck, was the motive power, controlled from a small table above, where Torrence manipulated screws, levers, and springs, utterly beyond my comprehension. The machinery was entirely out of the way, and the space utilized to admirable advantage. Cushioned seats surrounded the wall of the saloon, and above was an open deck which ran the entire length of the boat. This was surrounded by an aluminum rail, filled in with a fine net of the same material. It required more nerve than I possessed at first to mount the ladder and look out over the taffrail, although the sense of security below was perfect, so that I could inspect the country from the saloon windows with as much indifference as though I were on the deck of an ocean steamer. It was not long, however, before I could go above and lean over the bulwarks with equal intrepidity. Through the hatch the sky was always visible, even in the saloon, which was never closed except in cold or stormy weather. In order to make the construction of our air ship perfectly clear, let the reader imagine a gigantic cartridge or cigar, tapering at each end. Now flatten the top of your cigar, and put a railing around it and it would represent our upper deck. Now, divide your cigar longitudinally halfway between the upper deck and the bottom, and from end to end; and you have our main deck; in the center of which is the saloon or dining room, or general living room, to the rear of which is the kitchen, and forward, our beds. Beneath this deck is the machinery, entirely out of sight, and operated from either the saloon or the upper deck. Our larder was more than ample; comprising an endless variety of tinned goods, as well as quantities of such vegetables as would
  • 33. keep in the open. We had large supplies of both fresh and salt meats, and all arranged to handle conveniently. In short, it was a camping outfit upon an extended scale, including wines, fruits, medicines and implements which might become necessary during the voyage. Having to do our own work, the equipment had been planned upon the most judicious and labor saving lines, so that it was astonishing how little effort was required to prepare a meal; and having no back yard to keep tidy, it was only necessary to throw the scraps and refuse overboard. At times when we hovered nearer the surface of the earth it was amusing to see what excitement we caused the populace. In passing over a village the entire population would turn out into the streets, and shout themselves hoarse before leaving them out of sight, and being unlike the ordinary balloon, we were naturally looked upon with greater astonishment. Torrence having set his controlling apparatus, it no longer required attention, until some change in speed, elevation, or direction was desired; so that he was as free to move about the vessel as I was. The landscape was passing beneath us, with a steady flowing motion, giving the impression that a considerable distance would be covered during the day, although the rate of speed was deceptive. It was interesting to trace our course over the charts, with which we were amply provided. Maps of each of the counties were spread out upon the table, and we were singularly well situated to test their accuracy. I was wondering how fast we were going and inquired. "About twenty-five miles an hour," said Torrence; "she is capable of much greater speed; but there's no hurry, and I don't want to strain her on her maiden trip."
  • 34. "And how high are we?" "About five hundred feet." I was reflecting that it was no very great height, or extraordinary speed, when I heard the sharp swinging sound of a bullet, and looked down. I saw a man passing through a field with a gun in his hand and looking up. Evidently he had fired at us, not knowing what we were; possibly with the intention of finding out. "He's going to shoot again!" I called to Torrence; but at that minute my brother pressed a button and we were swung aloft with great velocity, as if seized by some gigantic hand. "I shan't give him a chance," he answered, as we plunged into a cloud, and then darted forward with increased speed. Again we were enveloped in a dense wet blanket, but as there was no fear of a collision, did not slacken our rate, but swept on like a hurricane unable to see a thing in any direction beyond the vessel. "Now," said Torrence, looking at a small instrument on the governing board, "we are whirling along at the rate of fifty miles an hour. Risky business on land in a cloud like this, but here—thank Heaven—there is nothing on the track! When we lower ourselves out of the fog, and come in view of the earth again, our sporting friend will be lost to sight." In about ten minutes we dropped to our former level, and reduced our speed. Of course there was no reason why we should not remain above, except that it was more interesting to have the earth for a companion. "Suppose he had hit us?" I observed. "There's not one chance in a hundred that he would hurt us if he had. I prepared for such enterprising fools by protecting her
  • 35. critical parts with asbestos and rubber; but it isn't pleasant to be fired at, and when one can move out of range so easily it seems the right thing to do." Later in the day I went above and found it the pleasantest part of the boat, and was surprised to find how all fear had left me. I asked Torrence if he intended to land anywhere in England; to which he gave a negative answer, saying that it might not be safe, from the danger of having papers served upon him. "There is no necessity to halt," he added; "our course is probably watched, and the news of our landing will be telegraphed to London, and they might make it difficult for us to get away again. We are safe out of their reach now, and it would be better to lot well enough alone. When I land it will be upon some uninhabited coast where they can't find us." "How long can you keep afloat?" I inquired. Torrence laughed. "Forever, if I want to. There's no limit to our capacity in that line. When the chemicals are exhausted, or have formed new combinations, I have only to supply the proper proportions of air and water, and the original conditions are restored. So if for any reason it should prove inconvenient to land, all we have to do is to drop a line with a bucket over any river or sea, and pull up a pail of water, run the compressor into the generator with the chemicals—and presto— all the power is restored. It is perpetual motion, with the very minimum of attention. Rather it is gravitation neutralized; and so simple, it is a marvel men never thought of it before." I had made no inquiry about the North Pole, supposing it was only a jest; not doubting, however, that he really meant to make an
  • 36. extended trip northward; but now, on alluding to the subject, Torrence declared that it was his serious intention to penetrate into the mysteries of the Polar regions, farther than any navigator had ever gone. "We may find it worth our while," he said, "and there is no reason why we should not." I told him that while I felt some doubt about the ice barriers, I was ready to follow him anywhere; to which he answered with a good deal of force that so long as the vessel depended only on the atmosphere for her support, he could see no reason why we could not ride over icebergs, frozen mountains and continents, to the ends of the earth. All we had to do was to keep above all obstructions, and to prevent ourselves from freezing, against which possibility we were amply provided. He showed me how our saloon could be made perfectly snug, and heated to any temperature desired; and that the motive apparatus was entirely protected, and could likewise be kept warm. "Should our upper deck become loaded with snow," he added, "we shall be obliged to put on our extra feathers and go above to clean it off; not such a very difficult matter when you consider that we are well provided with the appliances." Indeed, it seemed to me that nothing had been overlooked, and as Torrence had all his life had a hankering for Arctic exploration, I was not greatly astonished at his decision. I reflected that the pole could never be reached except by balloon, and that the difficulty of ordinary ballooning was the impossibility of advancing against air currents, and that since our ship had overcome that point, it did really appear as if we might be in a fair way to accomplish
  • 37. something more than other explorers. I became greatly interested, and began to look for marvelous results. At noon I went into the galley and prepared dinner, while Torrence kept watch above on the upper deck, where there was also a duplicate controlling board. We had eaten nothing since the previous night; the excitement of getting off having kept the thought of food from entering our heads, but now we were hungry. It was undoubtedly the first time since the creation that a meal had been cooked and eaten at that elevation over Northhampton, but it was none the worse for that, and two hungrier men could not have honored the occasion. From our seats in the saloon we had a good outlook upon every side. Forward we looked directly ahead through the cuddy ports—aft—through our stern lights in the galley, and upon either side were great sliding windows. The watch was, of course, only to guard against any unexpected elevation in the land, such as a hill, otherwise—or even had we been a little higher—we might have drawn the blinds and run on with impunity. After dinner we threw the scraps overboard, and went on deck for a smoke, and watched the country steadily slipping away beneath us. We were fanned by a gentle breeze, which might have been stiffer, but such wind as there was, was blowing dead aft. "This," said Torrence, looking about him with pride, "is what I call the climax of living. Above your enemies; above your friends; and out of reach of all the petty annoyances of earth!" I was as jubilant as he, and found it quite as difficult to conceal my emotions, which were altogether natural; for has not flight been always regarded as a prerogative of angels? and has not man aspired to it as the most perfect form of migration? The exhilaration
  • 38. was beyond description; and as we swept on through that long summer day, there was a sense of power and freedom which no other form of locomotion could impart. "I could never be content to live down there again!" I said, flipping the ashes from my cigar overboard. "Nor I," said Torrence; "not after this experience. The sky is good enough for me!" Toward evening we could hear the tinkling of bells and lowing of herds, and catch an occasional shout of surprise from a frightened farmer, as we dipped a little nearer earthward, and then skurried aloft and away, before he had time to recover his equanimity. At a small village in the southern part of Lincolnshire we pounced suddenly upon a traveling circus, and stampeded the entire crowd, not one of which will ever forget us. It was the grandest game imaginable; to come swooping down to within fifty or seventy-five feet of the ground, over an unsuspecting congregation of countrymen, and then dart onward and upward amid their shouts of consternation. However, we did not indulge in this sort of thing often, not wishing to incur the risk of being fired at. It showed, nevertheless, the absolute control we had over the machine, and was interesting from a scientific, as well as a humorous point of view. Toward sundown I smelled salt air, and knew we were approaching the sea. Then we ran into a bank of mist, and the earth was lost to view. I asked Torrence where we were heading for, and he said: "I am going to run around the city of Hull; leaving it a few miles upon our right, so as not to attract attention, and then cross over to
  • 39. Norway." "You surely don't intend to try the North Sea to-night!" I exclaimed in surprise. "Why not? There is no danger," he answered. I did not argue the matter, feeling safe in his hands. The fog bank continued for some minutes, and when we suddenly ran out of it, imagine my astonishment to find ourselves hovering directly over a large city, with the sea beyond. X. Torrence jumped up in consternation, and looking overboard, exclaimed with an oath that he thought we were at least five miles to the southwest of that town. "And what difference does it make?" I inquired. "Look for yourself!" he cried; "they are expecting us. I feared our course would be telegraphed to all sea ports; but they shan't track me out of the country," he added, looking aloft significantly, "that is, not if I can help it." "I should say we had decidedly the whip handle of them!" I replied. "So we have. Of course they can't stop us, but I think it will be just as well to give them a false scent for their trouble. It may be interesting to use a little strategy with these people, Gurt, although we are undoubtedly masters of the situation."
  • 40. Looking down I saw that the streets were crowded with people gazing up at us; and around the Wilberforce monument, on both sides of the bridge, it looked as if a mob had gathered to intercept our progress. In the open square, probably not less than a hundred soldiers had been assembled under arms, and had a very threatening aspect. "Surely they won't fire on us!" I exclaimed. "Not a bit of danger, they wouldn't dare; and if they did, they couldn't hurt us. No, the red coats are only for show; but if they got ugly, we could clean out the crowd by simply dropping a lot of cartridges overboard, without taking our guns out of the racks." He pressed a button, turned a lever, and we slowed down. "They want to speak to us, and perhaps it will be just as well to give them a chance." A man was waving a white flag, evidently intended to attract our attention. He appeared to be some high functionary of the town, judging from his dress and general deportment. He held a paper in his other hand, which he indicated was for us. Torrence waved his handkerchief in reply, and pulled the air ship down to a dead halt, about two hundred and fifty feet above the level of the street. "It may be the injunction!" I suggested. "Too late for that now," said Torrence; "they can't enjoin me after I've left. But I don't want them to know my course, and shall therefore humbug them a little." He looked earnestly above at a great white cloud that had crept up from the southwest, and which had now nearly covered the sky. He then took a pencil, and with a writing pad resting on the rail, wrote:
  • 41. "If you have any communication to make I will let down a line." This he threw overboard. It was picked up immediately, and handed to the official who was standing quite separate from the others. Shouts of "lower your line!" were now heard distinctly, and in another minute we had dropped a cord overboard, with a screw tied to the end for a weight. It did not take long to draw up the line again, at the end of which was an official looking document. Torrence tore open the envelope hastily, and began reading. In a minute he thrust it into his pocket and said: "Rot!" "What's the matter?" I asked him. "That blackguard, Hart, wants to get me back to London. Pretends I've committed a crime by moving the air ship without his consent. Promises forgiveness—the lunatic—if I'll return; and—of all the gall in creation—says he will pay down a handsome sum, as he calls it, for a half interest in the air ship, if I'll come back and make it over to him; and then to cap the climax, has the effrontery to threaten me if I don't do it. The fellow must either be a dolt himself or take me for one. But I'll make it interesting for him, nevertheless!" "They must take us for a brace of nincompoops," I replied; "but is it in the form of a summons?" "Seems to be a kind of capias for my arrest, but how on earth can they execute their orders while I'm up here?" said Torrence. "You surely don't intend to return," I said, looking over his shoulder. "Of course not; but I'm determined not to be tracked out of the country. The man has done all he could to thwart me by foul means.
  • 42. He has tried to entrap me in a pretended form of law. He endeavored to prevent my sailing by procuring an injunction issued upon false representations, and if he's fool enough to suppose that I'd return to London—why let him suppose it, and wait, and sweat!" He now headed the air ship toward London, and rising, sailed away from the town. "Let them think what they please!" he said. Torrence got up on the top deck and waved his hat, and then every one shouted. I think there was some doubt, however, as to whether we really intended to return, until they saw us gradually head about, and point our prow toward London; then there was an unmistakable yell of delight from every throat. We were soon running against the wind, due south. The cloud bank which had been steadily pushing up out of the southwest now nearly covered the sky at an elevation of many thousand feet. The city of Hull was fading in the distance. It would soon be lost to sight. I looked at the earth below, and saw that we were steadily ascending upon an inclined plane. "When we are wrapt in the bosom of the clouds," said Torrence, "I intend to put about, and run directly over their heads, out of sight, and be far to seaward before the sun sets." The clouds were still at a great altitude above us; and to prevent our real intentions being discovered we made the ascent very gradually, still steering south, but on an ascending plane, so that upon entering the cloud bank it would be apparent to all that we were still headed for London. The elevation might be easily accounted for on the hypothesis of air currents, so that no suspicion of insincerity would be aroused on the part of those watching us.
  • 43. "Now," said Torrence, "as we are going up to a great height, we might find it more comfortable to slip on warmer clothing; or at all events to get out some top coats." This we did, and then seating ourselves on deck, watched the great feathery mass into whose bosom we were gradually ascending. All at once the earth, the sky, and the greater part of the air ship vanished. We had plunged into the cloud, and I could not even see Torry, who was sitting only a few feet away. Luckily we had on tarpaulins, or we should have been wet to the skin. It was like unaided flight, not even our support being visible. Torrence's voice came out of the invisible, producing a weird sensation, and I could feel that we were still being borne rapidly upward. "Still ascending?" I inquired, feeling as if I were addressing chaos. "Still ascending!" came the answer. "How much higher do we go?" "Clear above this bank. It will be pleasanter." The words had a strange unnatural sound, as if coming from under the water. My body was the only objective reality in all creation, and even the more distant parts of that showed a tendency to evade me. Still onward and upward, with nothing to prove our motion save the feeling which the vessel imparted. Suddenly a flood of sunlight enveloped us, and we rose like a duck out of the water into another element. A milk-white sea was spread beneath; a dazzling sky above. Again Torrence was at his screws and levers. We halted, and trembled for a moment in midair, preparatory to changing our course; and then, with the rush of a sudden gale, went
  • 44. swirling ahead in the opposite direction. A minute later he looked at the register and said: "Altitude, eight thousand two hundred. Speed, a mile a minute. Course, northeast by north!" And now the Hullites could amuse themselves speculating how long it would take us to reach London, while we swept on to the North Sea. Our present altitude was unpleasantly cold, and the atmosphere perceptibly rarefied, but it was not the intention to remain at such an elevation longer than necessary, and when well beyond the English coast we would descend to our former level. It was here that a strange sight attracted our attention. As the sun worn down, our milky ocean became transfused with color. At first the change was slight, merely a rosy flush caught against the higher points; but quickly the entire surface was emblazoned; flooded with a million dyes of liquid fire, of a depth and splendor that was dazzling. Such purples, greens, and violets—vivid, intense, pale, and shadowy. It was as if we had suddenly discovered the polychromatic sea of an unknown planet, but a sea whose waters were strangely lacking in specific gravity and from whose surface a myriad eddies of violet and other colored smokes arose like incense, curling, twisting, and falling, and constantly changing tone, shape, and density over the entire mass. We were bewildered—dazed. While looking down upon this marvelous panorama we were suddenly startled by a sight I shall never forget. Far down to the east another air ship was following at tremendous speed. Black and forbidding it plunged along through the fiery waves, as if bent on running us down. It was the
  • 45. counterpart of our own vessel. We seized each other's hands in amazement, overcome with horror. So brilliant was the scene below that it was an instant before we realized that the awful object was our own phantom, or shadow, cast upon the clouds beneath; but during that instant it was a terrifying sight. When the sun disappeared we were left in the dull gray of twilight, and as the cold was increasing began at once descending to a lower level. Again the cloud drift was about us, darker and denser than ever; but we quickly passed through it, and I was surprised on emerging, to find the North Sea beneath, and the bluffs of Scarborough fading in the distance. "There is no danger of our being sighted from land now!" said Torrence, checking our descent, and fixing the altitude at about five hundred feet above the sea, He also reduced our speed to its former rate, twenty-five miles an hour, which he said was fast enough. The temperature here was warm and pleasant, with light breeze from the southwest, which, by the by, we did not catch, as we were moving faster, in the opposite direction, making our own wind. The sea was deserted, and the land barely visible. It would still be some time before dark, and we took places on deck to watch out for vessels. We had purposely taken a course away from the track of the Wilson steamers, which ply between Drontheim and Hull; not that it was a matter of any vital importance, but Torrence wanted to keep our movements from the public if possible. This was easily done, both by reason of an extended horizon and the enormous speed we could develop if necessary. As darkness came on we went below, closing the shutters to all lookouts, so as not to reveal our position, and then lighted a
  • 46. swinging lamp, deriving all necessary ventilation from above, whence no light was visible. Having thus shut ourselves in from the observation of the world, we set about getting supper. Nothing could be more cosy; suspended in midair, and surrounded with every luxury, while partaking of our evening meal. The consciousness of absolute independence of the world; the sense of power, which our command of the situation imparted, was, to say the least, extremely gratifying. The feudal lord in his castle might be harried and captured by an enemy; but our enemies could be laughed at with impunity. After supper we amused ourselves with an experiment at dish washing, which proved very satisfactory. The plates were simply piled into a net and lowered to the sea by a cord. After swishing about for a while, they were drawn up clean. Of course we dropped our level to within forty or fifty feet of the water, and greatly slackened speed during the performance, but it saved a lot of trouble. On completing these housekeeping arrangements we climbed up on deck, for a chat and smoke before retiring. The night was dark, there being no moon, and the sky overcast, beside which the air was misty. We kept our position well above all mast-heads, should there be any, and took extra precaution to prevent a certain nimbus-like reflection against the mist by putting out the lights as soon as supper was over. Torrence touched his controller, and we rose to our former altitude, remarking that our course only insured us against collision with steamers; and that sailing ships were liable to be found wherever there was water enough to float them. "And there is no danger of dropping to a lower level unawares?" I asked.
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