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Market Research for Country Club

This paper discusses market research and the way in which it might be applied by the management of a country club to find out why their membership is falling and no one new is joining.

Introduction

Market research is a vital tool for anyone who is considering developing a new product, repositioning an existing product, starting a business, analyzing business performance (or lack of performance); it applies to many situations. By going directly to the consumer, developers, managers, owners and others can get a more accurate idea of the realities of their situation than can be found by reviewing past performance or previous records. Both are useful, but the past is not always a reliable guide to the future. Something more is needed, and market research provides that dimension.

This paper discusses market research for the Horton Country Club, a new golf club that is not attracting the memberships it needs to survive and grow. The paper targets three specific areas that the HCC management should consider with regard to their problems: where they compare unfavourably to similar clubs; how they are perceived; and ways to increase membership applications.

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This paper further considers the various methods for conducting market research and suggests which is the most appropriate in these situations, and why. Problems inherent in the chosen method are also discussed. Finally, the paper incorporates a literature review.

The Steps in Market Research

Two of the sources I found differ on the number of steps in the market research process: one suggests six; the other five. However, the processes are virtually identical. Peter Chisnall lists five steps: research brief; research proposal; data collection; data analysis and evaluation; and preparation and presentation of the research report.

Churchill’s list is similar: problem formulation (research brief); research design (research proposal); design of data collection (this has no counterpart); sample design and data collection (data collection); analysis and interpretation of data (data analysis and evaluation) and research report (preparation and presentation of the research report). It’s apparent that Churchill has broken down the data collection into more detail than Chisnall, but the processes are, to all intents and purposes, identical. I believe it’s fair to take this five-step process as being the structure of any market research project.

The first step, then, and one of the most important, is to precisely define the problem to be solved. If this step is not accurate, then the entire study will be flawed; in effect, the person making the survey will ask the wrong questions. To begin understanding what’s needed in this case, we should consider the type of enterprise that is considering making the survey.

We are dealing with an entity known as the “Horton Country Club,” and thus we can make some assumptions about it without going too far afield. First, this is a social organization, which means that by definition we are going to be asking questions about feelings and attitudes, rather than definite facts.

We might consider, for instance, if an inability to get into the club leads someone to feel embarrassment at his or her failure to enhance their social standing; however, we would hardly put the answer in the same category of importance as to whether or not the person has failed to recognize the symptoms of a life-threatening illness.

However, because membership in a country club is something of a “status symbol,” it is possible that answers regarding the issue will not always be truthful. The respondent is likely to want to impress the interviewer and may give answers that are skewed because of that bias. But before we discuss that, let’s return to the problem of defining the best type of research for this situation.

Types of Market Research

Very generally, there are two basic types of research: qualitative and quantitative. “The problems qualitative research is most frequently required to address are those of understanding as opposed to assessment.” (Bradley, p. 5). He goes on: “Most problems of human behaviour involve complex variables, where the relationship is not reflected or self-explanatory. Hence questions such as … ‘how might a given advertising campaign be working’ are essentially qualitative questions.” (Bradley, p. 5). It seems that questions such as “how can a country club increase its membership” would fall into this category. We are trying to understand the market, not predict it; nor are we “crunching numbers.” Therefore we need a qualitative approach.

The one thing that I’ve found in all sources is a strong emphasis on the fact that it is imperative to have a clear, effective research strategy before beginning the work. Every author stresses this concept because a poor plan can lead to erroneous, even useless, results and expensive mistakes. One classic example is that of a market research survey done on dog food. The researcher
“… tested the demand for dog food; he tested the package size, the design, the whole advertising program.

Then he launched the product with a big campaign, got the proper distribution channels, put it on the market and had tremendous sales. But two months later, the bottom dropped out—no follow-up sales. So he called in an expert, who took the dog food out to the local pound, put it in front of the dogs—and they would not touch it. For all the big marketing study, no one had tried the product on the dogs.” (Churchill, pp. 22-23).

Churchill points out rightly that it’s people who buy dog food, not the dogs themselves. However, this is one case in which the dogs should definitely have been included in the sample. (We’ll come to sampling and sample frames when we discuss questionnaire design.) In addition to being funny, it points up the necessity of beginning the project correctly to avoid poor results.

The Project

It would seem logical at this point to return to the three points we want to cover and see what we can devise for each of them. The first is the fact that HCC needs to identify those areas in which it is weak compared to similar clubs in the area. Keep in mind, however, that all such institutions are experiencing difficulties in retaining old members and attracting new ones. It might be that there is a widespread economic downturn that would preclude people from spending money on what might be seen as an indulgence. When problems develop in any economy, voluntary spending is the first thing that people cut: they stop making charitable donations; they eat out less frequently; they let magazine subscriptions lapse; they might well decide to forego what is obviously a luxury.

Even though a country club membership would seem to be aimed at the wealthy, the fact that all clubs are experiencing problems indicates that the phenomenon is not merely localized, and maybe causing uneasiness for everyone. However, even though the scenario proposed seems to me to indicate a general economic slowing, that needn’t concern us unduly. No matter the cause of the problem, the club will obviously want to resolve it and build its membership when things are better, even if it cannot do so immediately.

In the matter of finding out what Horton lacks as compared to other, similar, clubs, the first step here would seem to be obvious. Before anything else, the management of the Horton Country Club needs to physically visit the other clubs to see what they are doing that Horton is not. This is the same as comparison shopping, where employees of one store visit another to see what prices the competition charges; how they arrange their displays; how they treat their customers; etc. This is a rudimentary but necessary step. They should also find out what the other clubs charge for membership, to determine if they are charging too much (or too little, for that matter. There is a perception that things that come at too low a cost are somehow inferior.)

Since country clubs are not found in every neighbourhood, I would suggest that the person visits can be made by members of the Horton staff, and thus will come under the heading of “observation,” which is one of the legitimate types of market research. After this general survey, however, it will become necessary to go into more depth. Does the question then become what method is most appropriate? There are several, with the most common being questionnaire, interview and observation; the latter is already in use. I would suggest that at this point, it might be most useful to develop a questionnaire to obtain further information about the habits of those who are likely candidates for membership in a country club.

A questionnaire, interview or any such mechanism is the “data collection” step of the process. The type of mechanism to be used will have been decided upon in the previous step, the research proposal; that step will have also contained the suggestion that observation should be part of the data collection process. But direct observation will only take us so far.

It will reveal whether the other clubs’ buildings are in good repair; if there is some particular architectural feature that is more attractive than those at Horton; if the food is better; if the golf course is better or more challenging, etc. But as I said, this is not sufficient. We must get at some of the underlying reasons for the decline in membership, and these are probably much more likely to be found in peoples’ attitudes towards club membership than anywhere else. Is the membership merely a status symbol, or is the golf course one that offers a challenge to golfers? Are the greens fees reasonable? Do people enjoy coming to Horton? Why or why not?

These questions are very subjective and could be handled either by interview (in person or phone) or through a questionnaire. My research would suggest that matters like this lend themselves to bias in personal interview situations because of the perceived “status” of the membership, and thus a questionnaire is probably a better tool at this point. (Keep in mind that in an interview, both the interviewer and respondent can demonstrate bias; it’s not simply the person being interviewed who may skew the answers.

Interviewing without bias is an art.) If we decide on the questionnaire, which can be filled out in private and thus avoids any need for the respondent to “brag,” we must now turn to the strengths and weaknesses of this type of data collection. (Please note that I’m not suggesting that bias is conscious; it is not.)

Questionnaire and survey design are exact sciences because these methodologies must be as free from bias as possible if the results are to have any value. This is a complex issue with entire books devoted to it, but unfortunately, this must be very brief.

First, sources say that questionnaires are burdensome, and in fact, they are; think of the last time you had to fill one out. The point is that information is almost always available elsewhere, and questionnaires should be the last resort. When information cannot be found to address the specific concern of the party commissioning the survey, it can still be used to pare down the questionnaire, eliminating questions that have already been answered and leaving only those things that cannot be found elsewhere.

Even the questions can be reworked to sharpen them to elicit precise responses. Assuming we’ve done all this and are still going ahead with the questionnaire, it must be constructed so as to return meaningful results. This means that the placement of questions is very important; that we must decide whether or not to use open-ended questions; and whether the questionnaire will be self-administered or group administered. The wording of the questions is also very important but space limitations make it impossible to discuss these aspects of the questionnaire further. We should be aware that designing a questionnaire is difficult and must be done properly in order to return a “good” result. (Oppenheim, pp. 24-49).

The second part of the problem is the investigation of how the club is perceived; that is, how potential members view it. Again, this is the type of market research that seems to me to be qualitative as it deals with feelings and impressions. And this question, too, seems to me to be one that might be most reasonably answered by the use of a questionnaire, through a telephone survey might also work and would be much faster.

In this case, the sample might well be taken from an area of x miles in radius, with the club as its centre; there must be a limit to the length of the trip one will make to play golf or visit a club, however nice it may be. (I discount professional tournaments or legendary courses such as St. Andrew’s in Scotland, which draws overseas visitors.)

We are discussing a club which presumably people would want to visit fairly regularly, weekly perhaps, or monthly; and if we accept those parameters it seems logical to also set a geographical limit on the sample.

The second limiter must surely be income level, as country clubs generally have substantial fees, set high enough to create an atmosphere of exclusivity. We would therefore need to sample wealthy residents within fairly close proximity to the club. The danger here is that the sample is too small to be meaningful, in which case both limiters might be expanded by increasing the geographical distance from the club and lowering the income level until a sufficiently large sample was obtained.

The final problem is to discover how to increase membership applications; the question here might be characterized as “What do we have to do to get you to join?” This is a broad, open-ended query which might well be addressed to the same people as those who are asked how they perceive the club; i.e., within geographical proximity to the club, and at an income level to sustain membership. However, this question is one that may well demand “rephrasing” and discussion, and thus may more properly be the object of a focus group.

Literature Review

The four textbooks listed in the reference section have been the most helpful tools in this discussion; the journal and magazine article less so. That is due to the fact that it was difficult to find articles that focused on market research strategies in general; with few exceptions, they applied the theories to specific fields, so that we have things like how to use market research in nursing, etc. Still, a brief review does help us to get to the basics of understanding market research, and how to design and implement meaningful research. Here, then, in no particular order, are some of the articles I found that discuss market research.

The first piece discusses a method for using clustering techniques to identify groups of questionnaires, used in a telephone survey, that have similar responses. The idea of identifying these “clusters” is to spot local trends. This paper describes the development of an original paradigm, the “Interrogative Memory Structure” (IMS) that has been developed to help in analyzing data. The paper is very technical in its discussion of algorithms and methodologies, and ends with the conclusion that the new IMS paradigm compares favorably to other methodologies. (Larkin, p. 307).

Birgelin, et al., have studied the way in which managers use the information provided to them via market research. Their conclusion is that the use of the information is directly related to its quality. This is particularly important with regard to the managers of market research companies, who are encouraged to provide the highest-quality information to their clients. (Birgelin, p. 533).

Susan Cornish discusses a concept that she calls “Market Intelligence,” which deals with ways of collecting all relevant data on an industry, and is thereby a methodology that goes far beyond simple market research. Her paper also reveals that there appears to be a connection between geography and the efficiency of the research; that research findings are more accurate if the survey is done close to the organization that requests the information. (Cornish, p. 451). Her article is concerned with the idea that innovative steps or other technical applications in product development can best be taken when all market information, not merely that supplied by market research, is available to the company.

A practical discussion of the way data is collected and used is found in Martin David’s evaluation of the SIPP Program, and how it might be improved. This is a good example of the way in which market research is used. (David, PG).

A very interesting article by The Gallup organization discusses the new technology of phone interviewing done by computer. In this method, a computer asks the questions and the respondent replies by pressing a number on the telephone keypad. The Gallup people call this the “interactive voice response” method. Although potentially promising—at least for market research firms if not for those who have to listen to the machine’s droning—the method has serious problems, and the biggest seems to be the tendency of respondents to break off the call if the survey isn’t completed within a reasonable length of time. (Tourangeau, p. 277).

A paper by Claudia Puchta discusses focus groups, which are an important market research tool. She considers many aspects of these groups, including the care with which questions must be developed and asked; how the groups can be directed and spontaneous at the same time; and the use of “elaborate questions” in the groups. (These are questions that require rewording and reformulating before they can be answered.) (Puchta, PG). Although we are not considering focus groups as one of our methods, they are a classic way of gathering information.

Another paper is a case study of the way in which researchers gathered information from elderly people about their usage of social services. It’s a good, practical example of the way in which market research works. (Croft, PG).

Some of the articles focus on the way in which market research agencies themselves work. One such piece is by Mike Donnelly, et al., and discusses such things as client expectations and whether or not the agencies meet them. At least in Donnelly’s study, it appears that they fall short at times, since he finds “…an overall small negative gap in market research agencies meeting their corporate clients’ expectations.” (Donnelly, PG). However, this disconnect may have more to do with unrealistic expectations than actual failure on the part of the market research firms.

An interesting piece by Kimmel investigates the possibility of ethical conflicts in marketing research. These conflicts arise because many different people have “vested” interests in the outcome of the research, and may attempt to influence participants in the studies so as to bias results in their favor. Kimmel suggests more attention should be paid to the place of ethics in market research. (Kimmel, PG).

Not surprisingly, perhaps, I found many articles dealing with the Internet and the way in which it seems to lend itself to market research in various ways. The Net would seem to be a “natural” for such activity; it’s immediate, direct, and private. Nevertheless, there are pitfalls in using it for such purposes. A comprehensive look at the positive and negative aspects of using the Net for such research is given in Ray Kent’s article, in which he goes over the problems and potentials, with particular emphasis on the difficulty of delineating an effective sample (Kent, PG).

Soyeon Shim points out that shopping via the Internet has grown tremendously in recent years, but that a substantial portion of Internet shoppers do not complete their purchases, abandoning them either at the “shopping cart” stage, or just before “checkout.” Shim’s piece posits a direct connection between the consumer’s intent to search for information on a product via the Internet, and the subsequent purchase of that product. (Shim, PG).

Another article makes use of market research to determine that 80% of new Web development will be business Web development; a direct application of the principles we’ve been discussing. (Charp, PG). And John Landry suggests that market research on the Internet will take a new turn with the creation of virtual prototypes of physical models for consumers to see and evaluate before purchase; this as part of a company’s market research program. (Landry, PG).

Still another piece goes back to the idea of using the Internet for marketing research, but rather than using it as a conduit for conducting the research itself, suggests that the Net is a good source of demographic information for a particular market segment. (Kannan, PG). Still another article, more sanguine than most, states that the Internet is a good medium for market research, provided that said research is designed and implemented correctly. This piece has none of the hesitancy of some of the others in trying to decide the validity of Internet research; it is solidly in favour of it as being less expensive and easier to conduct. (Magee, PG).

David Smith discusses a concept not yet touched on here, that of small businesses using market research. In general, market research is thought of as something done by large corporations before launching a new product or aggressive campaign, but most businesses are small (73% according to Smith, a U.K. writer). This is a huge potential market for market researchers to ignore, and
Smith suggests that with the advent of the Internet, market research will be simpler and easier for the entrepreneur and other small business people to conduct, or have conducted for them by research agencies. (Smith, PG).

The market research also comes into play when dealing with implementing technology in the classroom. It was market research that gave educators the data they needed to develop Project Horizon, a system for integrating technology into the classroom. (Sanderson, PG).
An extremely interesting article discussed the ethics of using a questionnaire as part of a study of women who were “presenting with breast disorders in primary care.” (Evans, PG).

The aim of the study was to lessen the number of women being referred for other procedures since many of the women were apparently merely fearful and did not present serious or life-threatening symptoms. Doctors and researchers felt that a questionnaire would be an appropriate means to discover the feelings of these women with regard to the management of their own health, but apparently, the questionnaire was felt to be inappropriate; it even angered some of the women. Thus it seems obvious that designing questionnaires is vital, but so is knowing when and how to present them to the subjects. (Evans, PG).

The actual questionnaire design was the subject of another article, this time from the Census Bureau, which discussed the difference between person-level and household-level questionnaires. Person-level questionnaires are those that deal with one individual at a time, while household-level take the family as a unit. Although person-level are appealing because they are easy to administer, they are time-consuming for the respondents and seem to be giving way to household-level questionnaires. (Hess, PG).

A two-part article deals specifically with questionnaire design. In it, the author discusses the ordering and wording of questionnaire design, and in Part I, he suggests that open-ended questions should be minimized. This would indicate that we made the correct choice when we decided a focus group, not a questionnaire, would be an appropriate vehicle for our research into how to increase memberships at the club. (O’Rourke, PG).

A final article about questionnaire design reiterates several points, specifically that questionnaires are time-consuming for the respondent to fill out, and should not be used unless the information is not available any other way. When they are used, the information already gathered as part of the planning process should be used to hone and tighten the questionnaire, eliminating those questions to which answers have been found elsewhere, and leaving only those that are absolutely necessary. The questions that remain should be precise and sharp, so that respondents’ answers will carry substantial meaning. (Dolle, PG).

As one can see, the literature on this subject is extensive and very wide-ranging, covering everything from Internet market research to questionnaire design, to the ethics of using questionnaires in some situations at all. The only possible conclusion to be drawn from this must be that market research is applicable to a wide variety of projects in virtually every industry. Such a wide and varied series of articles is inexplicable unless we make such an assumption.

Conclusion

A paper this short cannot begin to do justice to the complexities of market research. Done correctly, it is an invaluable tool; done improperly, it’s worse than useless.

In this case, it would seem that observation, questionnaires, a possible telephone survey and focus group will be needed to accurately determine the reasons for the problems at the country club, and a possible solution.
In addition, the literature review has revealed how far ranging and complex market research is.

References

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Tourangeau, Roger, Darby Miller Steiger and David Wilson. “Self-Administered Questions by Telephone: Evaluating Interactive Voice Response.” Public Opinion Quarterly 66 (2002): 265-278.

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