Diageo Market Research Case Study

Background

Diageo had a two-fold issue in an international airport in Canada:

First, sales had dropped significantly in over previous years

Second, they had launched a campaign to deal with what they believed was the issue (lack of knowledge about duty free limits by locals) and wanted to know if it was effective

The campaign was built on the premise that the reason for the sales decline was because consumers were not aware of their duty free purchasing privileges.

Our Approach

To assess whether the campaign was effective, we broke it down into the following set of questions:

Was the campaign being noticed?

Did travelers understand it?

Was it having a positive impact on sales?

The RIGHT Answer

Interviewing travelers and store staff/managers, we learned that the sales issue was likely structural: removal of flights, changes in traveler profile, and currency shifts had made it less beneficial to buy in Canadian airports.

The campaign itself was well-remembered, but not effective at driving sales because it was based on the false assumption that it was lack of awareness and knowledge that was responsible for sales declines. In fact, most travelers were aware of the duty free limits!

Home 123 Market Research Case Study

Background

A mortgage lender client in the US had a large number of media channels and lending branches that it was allocating media budget to. The distribution of these funds wasn’t done in a systematic way.

Our client posed the following question to us:

Can we develop a system that produces more efficient conversion of marketing dollars into loan volume (and thus, profit) than the status quo?

Our Approach

We adopted an approach similar to that used by mutual funds in maximizing the return of their portfolio – allocate funds to different investments based on their rate of return. Thinking about each different brand and media channel as the options available, we developed an algorithm that rebalanced, on a monthly basis, each branch’s and each channel’s marketing allocation based on their historical ROI.

The RIGHT Answer

We developed a system that utilised historical data to propose future month’s marketing funds allocations.

The budget allocated to each branch and media channel was based on their past contribution to profit.

Media channels and branches were rewarded with more budget for improved results.

LA Metro Market Research Case Study

 

Background

When first implemented, the LA Metro system operated without barriers. In other words, passengers could get on and off without buying a ticket.

The incentive to buy a ticket was provided by the fact that officers regularly patrolled the trains asking for evidence that passengers had paid fares.

Barrier systems have their own costs associated with them. The economic viability of this barrier free system rested on the fare evasion rate – did the value of the fares forgone exceed the cost of operating a barrier system?

Our Approach

Accurately estimating the fare evasion rate for a sprawling metro rail system is no easy task. To do it cost effectively requires an efficient sampling procedure and an efficient interviewing procedure, so as to cover all parts of the metro system and also to stop fare evaders from avoiding the fare checkers.

Further, we surmised that fare evasion on a no barrier system was not related to a rider’s goodwill as much as it was to the perception of getting caught or fear of the consequences of doing so. As it turned out, riders given citations were rarely punished, creating the odd scenario where someone who has been caught evading fares is more likely to do it again in future because they know there are no consequences.

The RIGHT Answer

At the time of the study fare evasion rates ranged from less than 4% on weekdays in some parts of the system to 25% on weekend evenings on other parts of the system.

The evasion rate was directly related to the perception of getting caught and to the consequences of being caught.

The results suggested a substantial increase in the presence of uniformed officers checking for fares at certain times of the day on certain segments and more consistency in the enforcement of punishments for evading fares.

Since the study was done, MTA has installed barriers to the system so that it is not possible to board without a ticket.

New Century Financial Corp

 

Market Research Case Study

 

Background

New Century Financial Corporation was one of the leading sub-prime lenders in the United States. In attempting to grow aggressively in its early days, the firm decided that both its wholesale and retail divisions could benefit from advertising – both to mortgage brokers and directly to consumers in the market for a mortgage.  However, the firm was very short on experience in developing and executing advertising campaigns.  One thing they did know, though, was that they first needed to figure out “what to say.”

Our Approach

We conceptualized the problem as one of positioning. The foundation for cost effective advertising is a sound position that prescribes who to target and what to say to them.  With these questions answered, most of the other questions associated with developing and executing winning advertising can fall into place relatively easily.

The RIGHT Answer

The answer we developed built on the idea that consumers want their mortgage transaction (whether originating a new mortgage or refinancing an existing one) done fast, but that mortgage lending was an inherently slow, tedious process full of the potential for errors.

The position we developed worked both with Wholesale and Retail divisions and:

• Paved the way for the company to grow 10-fold in the next five years
• Resulted in the development of the first automated underwriting tool for the sub-prime mortgage business