Case 14 2 Talbot Razor Products Company One Products Marketed Talbot Razor Products Compan Q28359448

CASE 14-2 Talbot Razor Products Company

One of the products marketed by Talbot Razor Products Company isan after-shave lotion called Enhance. This brand is sold throughdrugstores, supermarkets, and department stores. Sales exceed $30million per year but are barely profitable because of advertisingexpenses that exceed $9 million. For some time the company and itsadvertising agency have felt the need to undertake a study toobtain more data on the characteristics of their users ascontrasted to those of other leading brands. Both the company andthe agency believe that such information would help them findbetter ways to promote the Enhance brand.

Preliminary discussions between the advertising department andthe research department of the advertising agency resulted in thefollowing study objectives.

1. To determine the characteristics of Enhance users versuscompetitors by such factors as age, income, occupation, maritalstatus, family size, education, social class, and leisure-timeactivities.

2. To determine the image of the Enhance brand versuscompetitors on such attributes as masculinity, expensiveness, anduser stereotypes (such as young men, factory workers, youngexecutives, and men living in small towns).

3. To discover the meaning to consumers of certain words thatwere used to describe after-shave lotions.

4. To examine the media habits of users by television programs,magazines, and newspapers.

In discussing the sampling universe, the advertising managerthought the study results should be broken down by heavy versuslight users of Enhance. In the manager’s opinion, as few as 15 to20 percent of the users might account for 60 percent of the totalpurchases.

It was not clear how many containers a user would have to buyduring a specified time period to qualify as a heavy or a lightuser. The research director and the advertising manager disagreedon a definition of user: The research director thought that anyonewho had used the Enhance product within the past year shouldqualify as a user and therefore be included in the study, while theadvertising manager thought that a user should be defined as onewho had purchased the product within the past three months. Infact, the advertising manager went on to say, “I am reallyinterested only in those people who say that the Enhance brand istheir favorite brand or the brand that they purchase more than anyother.”

After much discussion about what constituted or shouldconstitute a user, the research director pointed out that theadvertising manager was being unrealistic about the whole samplingproblem. A pilot study was conducted to determine how manyqualified users could be obtained out of every 100 personsinterviewed in Sacramento, California. While the findings were notcompletely representative, they did provide a crude estimate of thesampling problem and the costs that would result from using anykind of a probability sample. The research director said:

In the Sacramento study we were interested only in finding outhow many males 18 years of age or older used after-shave, whatbrands they had purchased during the past year and the past threemonths, and what brand they bought most frequently.

All interviewing took place during the evening hours and theweekend. The findings revealed that only about 70 percent of themale respondents were at home when the interviewer made the call.Of those who were home and who agreed to cooperate, only 65 percentwere users of after-shave: that is, affirmatively answered thequestion: “Do you ever use after-shave?” Of those who usedafter-shave, only 7 percent had purchased the Enhance brand withinthe past three months, while 15 percent reported having purchasedit within the past year. The costs of the Sacramento job figuredout to about $6.00 per contact including the not-at-homes,refusals, and completed interviews, all as contacts. The samplesize for the Sacramento pilot study was 212 male respondents, andthe field costs were $1,272. These costs will be increasedsubstantially if the sample includes smaller towns and farminterviews.

The research director believed that the best sample size theycould hope for would be one that provided about 100 interviews withEnhance users plus 100 interviews with users of other brands ineach of 10 to 15 metropolitan areas. This would provide a totalsample size of 2,000 to 3,000 and would require contacts withbetween 40,000 and 50,000 respondents. The research directorindicated that this size sample would permit breakdown of theresults for the United States by heavy versus light users.

The advertising manager, who did not think this would be anadequate national sample, said: I can’t present these results to mymanagement and tell them that they are representative of the wholecountry, and I doubt if the sample in each of the 10 to 15metropolitan areas is big enough to enable us to draw reliableconclusions about our customers and noncustomers in that particulararea. I don’t see how you can sample each metropolitan area on anequal basis. I would think that the bigger areas such as New Yorkand Chicago should have bigger samples than some of the smallermetropolitan areas.

The research director explained that this way of allocating thesample between areas was not correct since the size of the universehad no effect on the size of the sample. According to the director:If we do it the way you are suggesting, it will mean that in someof the big metropolitan areas we’ll end up with 150 to 200interviews, while in some of the smaller ones, we’ll have only 50or 75 interviews.

Under such conditions it would be impossible to break out thefindings of each metropolitan area separately.

If we sample each area equally, we can weigh the resultsobtained from the different metropolitan areas so as to getaccurate U.S. totals.

When the discussion turned to costs, the advertising managercomplained:

I can’t possibly tell my management that we have to make 40,000to 50,000 calls in order to get 2,000 to 3,000 interviews. They’regoing to tell me that we’re wasting an awful lot of money just tofind users. Why can’t we find Enhance users by selecting a sampleof drugstores and offering druggists some money for getting namesand addresses of those men who buy after-shave? We could probablylocate Enhance users for maybe 35 to 50 cents each.

The research director admitted that this would be a much cheaperway, but pointed out that it is not known what kind of sample wouldresult, and therefore it would be impossible to tell anything atall about the reliability of the survey. The advertising managerthought management would provide no more than $30,000 for thestudy. The research director estimated that the results could betabulated, analyzed, a report written, and the results presented tomanagement for about $7,000, thus leaving around $23,000 forfieldwork.

Questions for Discussion

1. How should the sampling universe be defined?

2. How large a sample should be collected?

3. How should the sample be distributed geographically?