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Researching marketing problems and opportunities with focus groups
Researching Marketing Problems and Opportunities with Focus Groups Joe L, Welch Focus group research is a popular and effective qualitative research method for generating ideas and assessing marketing programs and concepts. This article provides marketers with insights about implementing focus groups in the industrial environment. It presents a specific procedure for conducting focus groups, potential industrial applications for the research technique, guidelines for making decisions about selecting moderators, establishing objectives, recruiting study participants, and controlling costs.
INTRODUCTION
Focus group research is a qualitative technique involving a small number of respondents who discuss selected topics with a moderator for approximately l-2 hours. Respondents are prescreened to ensure that they conform to specified criteria and are invited Address correspondence to: Professor partment. North Texas State University, 76203.3677.
Industrial Marketing 0 Elsevier Science
52 Vanderbilt
Management
Joe L. Welch, Marketing P.O. Box 13677, Denton,
14, 245-253
(1985)
Publishing Co., Inc., 1985 Ave., New York, New York 10017
DeTX
to,a central location to participate in the discussion. In exchange for contributing their time to the research discussion, each participant is given a monetary incentive. Although the focus group technique has been discussed in the literature for over 20 years and utilized for a variety of purposes by consumer goods companies [3], it still has not become a significant tool for most industrial goods organizations. In one study, it was found that 47% of the companies surveyed utilized focus groups to help solve marketing problems. Although 81% of consumer goods companies employed focus group research, only 16% of industrial goods firms employed the technique [4]. It is important that industrial marketing managers understand that the objectives and strengths of the focus group technique are as applicable to the industrial environment as they are to the consumer packaged goods business. It is also important for industrial managers to understand factors that should be considered, as well as costs and problems associated with 245 0019-8501/85/$3.30
the approach. Although some cursory insights have been provided in the literature on the application of general qualitative research techniques to industrial marketing problems, there is little specific direction available to these managers for planning and administering focus group research [7]. The purpose of this article is to provide industrial marketers with an in-depth examination of the procedure, applications, costs, problems, and decision factors in focus group research. PROCEDURE FOR PLANNING AND ADMINISTERING FOCUS GROUPS
Focus groups begin with a specific statement of the problem to be examined. The critical questions that should be answered by the industrial marketing execcutive are as follows: “How will the research findings be utilized”? “ If we uncover certain ideas from the groups, are we in a position to react to those ideas”? Overall, executives must understand why they are conducting the research and how they will potentially behave when presented with the results.
veloped. Also, a moderator’s outline that will be utilized during the focus group interview is completed. This is accomplished through in-depth discussion between clients and the moderator. Insofar as the moderator must pursue important ideas when they are mentioned by the participants, it is critical that the moderator understand completely the client’s business and how the research findings will be utilized. As was pointed out by Miskovic [5], the first rule for clients in conducting focus group research is “get to know the moderator.” Participants are then recruited, and the discussion groups are conducted. Following the group discussion, the moderator reviews the audiotapes and/or videotapes and analyzes the results. The moderator/ analyst not only reports specific comments and findings but also looks for consistent responses, new ideas, concerns suggested by facial expressions and body language, and other hypotheses that may or may not have received confirmation from all of the participants. The point is that the findings should be exhaustively analyzed, and numerous hypotheses should be advanced.
A moderator’s outline for group interviewing must be developed. Step two involves the development of a detailed list of objectives that company executives want to accomplish. In reality, the objectives represent a list of questions the company would like to answer. Input from numerous functional areas should be solicited. Also, once a list of objectives are finalized, they should be communicated to each interested party so that everyone understands what is to be accomplished with the research. After the purpose and objectives are identified, a questionnaire to screen potential participants is de-
JOE L. WELCH is an Associate Professor of Marketing at North Texas State University, Denton, Texas. He was formerly a principal with Savitz Research Center, Dallas, Texas.
246
Finally, a research report is written and presented to the executives. They should be warned verbally and in writing that the findings represent hypotheses and should not be projected beyond the scope of the groups themselves. Figure 1 outlines the procedure for conducting focus groups. HOW MANY GROUPS
TO CONDUCT
The number of focus groups that should be conducted on a single subject depend on several factors: 1. Number of distinct market segments represented in the firm’s target audience. 2. Geographical scope of the firm’s market area. 3. Importance of the management’s decision resulting from the research.
Identify the Purpose and Justificetion for the Study
Specifically State Objectives/flw?stionr to be Answered
I
1
I I
I
[
FIGURE 1.
Write a Sctwening Questionnaire
1
Develop a Moderator’s Outline
I
Review Tapas and Analyze the Findings
Write and Present a Report to Management
Procedure
for conducting
I
I
focus groups
Number of potential participants in a given geographical market area. 5. Number of new ideas generated by each successive group. 4.
One key factor in deciding on the number of focus groups to conduct is the number of distinct market segments represented in the firm’s target strategies. If a company primarily sells equipment to banks, for example, and it is looking for new product ideas for this segment, then the company may only conduct one or two groups of bankers. On the other hand, if the company markets office equipment to small, medium, and large businesses, then it would likely need to conduct several groups of each one of these segments of businesses in order to assess differences in their requirements. Mixing participants from distinct market segments into a single group is not recommended because each person’s segment has different requirements. A corporation that operates in limited market segments may need to conduct only two focus groups. In contrast, nationwide marketers should solicit focus group input from key submarkets within its market areas. Therefore, it may be necessary to conduct eight or ten groups distributed over four or five markets. The size of budgets for marketing research are significantly impacted by the importance of the attendant marketing decisions. In some cases, marketers
are simply attempting to understand a business phenomenon but are not tying important decisions to the research. Generally, two or three groups are adequate for such exploratory investigations. For decisions involving the development of new product ideas, the implementation of new advertising campaigns, or other important decisions requiring a significant expenditure of funds, it is recommended that four to six groups be conducted for each segment. The number of focus groups a company can conduct are often constrained by the size of the respondent population in any given area. For example, a manufacturer of machinery parts for the after market wanted to get input about a proposed sales brochure from distributors who carried industrial parts and equipment. Insofar as there were only a few of these distributors in any given market area, only one group could be organized within a large geographical market. The final and, perhaps, most important factor impacting on the number of groups to conduct is the value of obtaining more ideas relative to the costs of obtaining the additional information. As Calder points out, one should continue to conduct additional discussion groups until the moderator can anticipate what is going to be said. This usually happens after three or four groups on the same subject [l]. It also suggests that at least two groups should always be conducted. WHO TO RECRUIT
FOR FOCUS GROUPS
Identifying and recruiting the appropriate participants for focus groups is one of the most important and difficult tasks. Recruiting is important because it is the key variable impacting on the quality and quantity of response. If the wrong people are recruited, results of the groups can be disastrous. In one case, distributors were recruited for a group to measure reactions to some new product ideas. After a few minutes of discussion, it became apparent that the distributors had little input into the decision to carry new lines of products. In such cases, input from these inappropriate participants is limited and misleading. Recruiting respondents is difficult because the suitability of participants is often not understood until the discussion begins. In the case of the distributors, a screening question was employed to determine their authority to make new product decisions. Although 247
all of the managers indicated that they had primary influence in the decision, in the final analysis, many had only minor influence. Also, research companies often do not monitor the recruiting efforts of interviewers. Interviewers may lead a person into giving answers that may be only if the recruiting job partially true. Furthermore, is particularly difficult, the research company may knowingly invite inappropriate respondents. On the other hand, the interviewers may ask questions appropriately but receive inaccurate answers from respondents. For example, in groups of personal computer users, several people mentioned in the screening interview that they used a Wang professional computer when they actually used a Wang VS word processing system. In contrast to consumer groups, industrial groups include people who have ambiguous titles, diverse responsibilities, and unclear reporting relationships. Also, there may only be a few appropriate participants represented in a market, as in the case of telecommunications managers. Therefore, the indus-
5.
6. 7. 8.
one wants to recruit personal computer users, do not simply ask for the brand and model of personal computers they use. Also ask them to describe the machine and its function to ensure that they are referring to the appropriate equipment. Require that recruiters provide completed screener questionnaires at the end of each day. Check them carefully to ensure that appropriate people were recruited from appropriate companies. When in doubt make a follow-up call personally to confirm the participant. Do not accept a!;sistants to the targeted respondents. Do not accept respondents who have participated in a focus group during the previous year. Have each participant arrive 15 minutes early to complete a prediscussion questionnaire. This will provide additional background information on each respondent, reconfirm their suitability for the discussion, and help the company collect factual information that would otherwise
Continue to conduct additional discussion groups until the moderator can anticipate what is going to be said, trial company that utilizes focus groups should follow eight important rules in recruiting participants. 1. Specifically define the characteristics of people to be included in the groups. 2. Develop screening questions that probe into all aspects of the respondents’ job functions. Do not depend on titles or other ambiguous definitions of one’s responsibilities. 3. Provide the research company with specific company and employee names, when possible. If specific categories of companies are needed, a list of qualified companies is critical. 4. Ask multiple questions about a single variable to validate the accuracy of answers. Therefore, if
248
require the discussion.
SELECTING
use of valuable
A FOCUS GROUP
time
during
the
MODERATOR
Selecting a person to moderate the focus groups may be the most important decision made by the industrial organization. In fact, one study found that advertising agencies’ research staffs rated attributes of the moderator higher than attributes of the research supplier or attributes of the report. The four key factors rated by agencies in the study included (1) the moderator’s ability to cover required topics, (2) the moderator’s familiarity with guidelines, (3)
the moderator’s understanding of study objectives, and (4) the moderator’s ability to probe key points made by respondents [6]. The moderator is responsible for helping the client conceptualize the problem, design a discussion outline, and interpret the results. The moderator must also be able to identify opportunities for pursuing ideas that were not anticipated and, therefore, not on the discussion outline. Often, the discussion moves away from the planned outline into other areas of the organization’s business. Although the moderator will not allow these diversions to proceed too far, he or she may recognize that the discussion is related to other decisions the company must make and, therefore, allow the discussion to continue. Therefore, moderators must understand their client’s business and the strategic implications of the focus group research. Moderators do not have to be trained psychologists. Rather, they must be good communicators with the ability to relax the participants and encourage them to candidly share ideas with one another. Moderators must be empathetic and capable of participating in the group without providing biased input or leading the participants into providing a desired response. Moderators must also be familiar enough with industrial marketing management and marketing research to provide an insightful interpretation of the findings and a productive plan for following up the group discussion. Being capable of giving their clients objective, third party input on the implications of research data is a characteristic that may moderators do not possess. However, it is a characteristic that can help clients maximize the value of focus group information. APPLICATIONS
OF FOCUS GROUP RESEARCH
The primary benefit of focus group research is the interaction created by both the setting and the moderator. Because people with common experiences participate in a group, the response of one person stimulates reactions from other participants. The discussion, therefore, evolves into a brainstorming session among participants from which a significant quantity of beliefs, ideas, and attitudes are generated. Focus groups are, therefore, much more valuable as a tool for generating ideas through inter-
actions than as a method for assessing a specific individual’s attitudes. Specific problems that can be studied, utilizing the focus group format, are as follows: 1. A publisher of engineering-oriented personal computer software generates new product ideas by asking engineers to discuss their job functions and the tools that would enable them to perform their job more effectively. 2. An aerospace company asks engineers to discuss factors that are important to them in selecting and retaining their employers in order to develop more creative copy for recruitment advertising. 3. An industrial product distributor organizes groups of customers to determine how they feel about changes in the distributor’s inside and outside sales programs. 4. An industrial cleaning and chemical products company asks maintenance personnel to provide input on a new program for distributing its cleaning products and cleaning services. 5. A major food service distributor measures the reactions of restaurateurs to change.! In its pricing strategy and incentives program. 6. A business computer manufacturer uses focus groups to determine attitudes toward alternative spokesmen for its television advertising. 7. An industrial equipment manufacturer gains insights underlying the responses to a quantitative telephone survey. 8. A motor freight carrier obtains reactions from distribution managers to finished magazine advertisements and the extent to which the advertisements’ meaning was understood and was consistent with the carrier’s image. 9. A manufacturer of dot matrix, letter quality, and laser printers gainspreliminary input on the way in which its target markets are segmented. 10. A manufacturer of telecommunications equipment conducts focus groups regularly to scan the environment for changes in competitive programs, customer needs, economic trends, and technological advances. 11. An oil and gas service company tests alternate logos among its target audience. 12. A textbook publisher queries professors in order to identify special promotional incen-
249
tive items that could be given out at professional meetings and mailed to colleges and universities. 13. A manufacturer of personal computers asks business users of personal computers to assist the company in developing an appropriate and functional product package.
As can be seen from these examples drawn from a diversity of industries, focus group research can be utilized to provide insights into a number of industrial marketing problems. The major applications of focus group research are summarized in Figure 2. COST OF FOCUS GROUPS
In contrast to consumer packaged goods research, the cost associated with conducting focus group research in the industrial setting can be high. Not only does the industrial corporation incur direct, out-ofpocket costs associated with conducting and analyzing the research but it also incurs indirect costs associated with coordinating the research company’s activities. Figure 3 details the direct and indirect costs and some normative estimates the marketing manager could expect to incur if conducting focus group research among business executives. The costs may be lower or higher in some areas of the country. Also, discussions with supervisors, secretaries, and lower level managers cost less to recruit and the incentives are lower than they are with higher level executives. On the other hand, costs associated with conducting focus groups with physicians, attorneys, or specialized professionals, such as office automation managers, can cost more than the norms listed in Figure 3.
FIGURE 2.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 250
Major applications
Identifying
FIGURE 3.
Costs of conducting discussions
focus group
Direct Costs (per Group)
Recruiting participants for the discussion groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $750 Renting a focus group room from a local research company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Fee for the moderating, analysis, and report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1000 Fee for designing focus group research and developing a moderator’s outline . . . . . . . . . . 150 Participant financial incentives ($75 X 10 participants) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750 Moderator’s travel expenses ($600 + 2 groups/day) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 Travel for clients to view the groups (3 clients) . . . . . . . . . . . . . . . .._.. . . . . . . . . . . . . . . . . . . 900 Food for clients, moderator, and respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Video taping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 Moderator’s expenses and fee for coordinating respondent recruiting with the research company . . . . . . . . . . . . . . . . . . 100 Word processing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Total direct costs/group . . . . . . . . . . . . . . . . . . . . . . . . . . . $4670 Indirect Costs
Executive time traveling to the focus groups Marketing managers time assisting the moderator develop the outline Executive time formulating the problem and evaluating the findings
of focus group research
and assessing new product ideas.
Making product-related decisions such as packaging, brand name, and logo. Creating advertising themes, copy, and illustrations.
Testing advertising concepts and finished copy. Identifying and assessing sales promotion ideas. Measuring reactions to pricing and distribution strategies. Uncovering competitive programs. Gaining insights about customer decision processes. Generating hypotheses about market segmentation and product positions. Understanding the reasons for answers to quantitative surveys.
The travel costs are difficult to avoid because most companies conduct groups in multiple market areas. Most people agree that it is risky to depend on input from business people in only one market. Because of changes in the business environment from one area to another, it is recommended that the company evaluate regional differences in opinions. The only travel-related cost that can be alleviated is the cost of executive travel to the group. Although it is important to have one client view the group and discuss ideas with the moderator before and after the discussions, having three or four clients observe the group is usually not productive. In fact, because observers are normally not trained to objectively assess the meaning of comments from focus groups and may give too much weight to single responses, their attendance may be counterproductive. It may lead to inappropriate conclusions and generalizations. By videotaping groups and then editing the tapes to reflect the significant findings, one can tell a videostory that captures the essence of the research and requires a minimum of executive time to watch. Videotaping and editing also helps to reduce travel costs.
PROBLEMS
WITH FOCUS GROUP RESEARCH
Although focus group research is an effective research technique for identifying and assessing ideas and marketing programs, it also presents certain problems that users of the procedure should be aware of. The primary problem is overenthusiasm for the findings. Corporate executives should always keep qualitative research data in perspective. Focus groups are valuable for exploring concepts and developing ideas, not for conclusively resolving issues or proving hypotheses. Even if a majority of respondents in six to eight groups agree on an issue, agreement may be a result of group dynamics and not individual evaluation and belief. Furthermore, when designing questions for focus group research, do not write questions that require a hand count. The number of people agreeing or disagreeing with a statement in focus group research is meaningless. If four participants indicate that they favor a new advertisement appearing in a trade magazine and six are against the advertisement, the actual percentage of people responding favorably and
unfavorably in the entire market could be 95% and 5%) respectively. In designing the focus group research, a minimum number of issues should be explored in a single group. Do not attempt to understand the entire world in one group discussion. Select one general topic and several important objectives associated with the topic. By attempting to ask too many questions and solve too many objectives, the company ends up not obtaining good quality input on any of the objectives. The participants should be allowed to discuss and evaluate a subject. They should not be rushed from one question to another. When the company wants to gather a large number of ideas on a diversity of subjects or assess individual responses, it is best to conduct in-depth, one-on-one interviews. In one study, it was found that one-on-one interviews generated more ideas than focus groups [2]. However, the costs of conducting and analyzing in-depth, one-on-one interviews are higher than those of focus groups. Another problem in focus group research is control of recruiting. In industrial groups where obtaining cooperation from participants is difficult, recruiting can become a significant problem. Recruiters will recruit friends, falsely complete screener questionnaires, utilize relatives of the research staff, and recruit professional respondents from panels of respondents that are maintained by the research company in order to reduce recruiting costs. One research manager of a large corporation stopped conducting focus groups in a major southwestern city because he kept seeing the same people in focus groups. Such an occurrence has to be more than a simple accident. To avoid the problem, the client can specify target companies and/or target respondents and also request that each participant be screened to ensure that he or she had not participated in a group discussion during the prior 12 months.
A CASE HISTORY Several years ago, a major computer manufacturer wanted to develop a long-run strategy for producing and marketing a line of personal computers. Executives for this company decided that the key issues that had to be resolved prior to developing a product included (1) the identification of a target audience
251
with a need not currently being satisfied by existing equipment, (2) hardware and software requirements of this target audience, (3) training needs of users, and (4) the optimum distribution/delivery system. Although the company utilized a significant amount of secondary data and quantitative research data to identify its target audience, the company utilized focus groups to confirm its findings from the secondary and quantitative research studies. The company recruited and interviewed department managers and office automation managers who utilized personal computers. A wide variety of brands of personal computers and departments were represented in each group. The findings of these user groups helped the manufacturer to understand how decisions were made to purchase brands of personal computers, problems associated with penetrating the targeted group of business users, opportunities for positioning an office system that complemented the users’ existing systems, customer preference for a distribution system, potential market subsegments based on industry applications, and the strengths and weaknesses of competing brands. Although the findings of the groups were not conclusive, they did confirm data uncovered from surveys and enabled the company to delineate a list of hypotheses about the characteristics of a new personal computer system and a potential delivery system. Armed with some ideas for product features, the company conducted several more groups of department managers to obtain reactions to the features. In addition to finding out which features were attractive to business users and which ones were only moderately useful, the company began to understand the important elements of software support systems. Hypotheses about the popularity of software and recommended changes in existing software were subsequently tested in a nationwide telephone survey of personal computer users. After these first two rounds of focus groups conducted in each of four major markets, the company was comfortable with a set of unique product features and several application-oriented software systems. One of the decision areas that was still unclear to the product management team, however, was the feasibility of alternative distribution systems. They were aware of the importance of dealers in distributing personal computers to business users but had
252
questions about the most effective way of approaching and selling these dealers. They also wanted to identify support services that the dealers needed and the likelihood that dealers would add new lines and/or drop existing lines to accommodate a new product. Therefore. groups of dealers were organized in four major markets and queried about their relationships with existing manufacturers, procedures they utilize to select brands, and services they perform for business customers. The group data were instrumental in structuring the dealer sales and support program. The company then understood how to approach dealers, at which stage in product development dealers should be involved with the manufacturer, and their sensitivities and needs. The groups also provided insights about how a dual system for utilizing dealers, as well as a direct sales force, could be implemented. The final stage in the research procedure involved interviewing secretaries and training personnel. Input was needed on the types of training programs and tutorials that should accompany a new personal computer system. The adequacy of existing training and attitudes toward several training ideas were evaluated. Also, similar to the special software applications of managers and professionals that had been identified in previous groups, the company ascertained from secretaries their own special needs. With this data, the company was equipped to develop a product package and quantitatively test the hardware, software, and training materials among managers, professionals, secretaries, and dealers. DISCUSSION This article has examined the use of focus group research in the industrial environment. Although the technique provides only tentative insights rather than conclusive facts, it can be a valuable tool for the industrial marketer. Output from this research offers direction to new product development, proand distribution strategies. It motional programs, gives marketers the opportunity to talk face-to-face with the people who are most instrumental in ensurcustomers. Focus ing their future: the company’s group research also gives meaning and support to the often vague, impersonal, and cursory quantitative statistics.
To maximize its value, however, every member of the marketing and management team must understand its applications and its weaknesses. They must also be willing to allocate the time necessary to crystallize objectives and specifically understand how the data will be utilized. In contrast to many narrowly defined quantitative studies, focus group research uncovers ideas that impact on numerous functional areas, thus calling for a broad base of input. If properly applied and thoroughly understood by everyone involved, however, the value of ideas and insights gained should certainly outweigh the executive time and corporate money expended.
REFERENCES MarketI. Calder. Bobby. Focus Groups and the Nature of Qualitative ing Research. Journal of Marketing Research 14, 3.53 (Aug 1977). The 2. Fern. Edward F.. The Use of Focus Groups for Idea Generation: Effects of Group Size. Acquaintanceship, and Moderator on Response Quantity and Quality. Journal of Marketing Research 19. I- 13 (1982). _z Goldman. Alfred ing 26(3), 61-68
E.. The Group (1962).
Depth Interview,
Journal of Marker-
4. Greenberg. Barnett A., Goldstucker, Jac L.. and Bellenger, Danny N.. What Techniques Are Used by Marketing Researchers in Business? Journal of Marketing 41(2). 64 (1977). 5 Miskovic. Darlene, 17, lY80).
Behind
the Mirror,
Advertising Age 51, 55 (Nov
6. Szybillo, George J., and Berger, Robert. What Advertising Agencies Think of Focus Groups, JournalofAdverfising Research 19,3l (1979). 7. Wallace. K. M.. The Use and Value of Qualitative Research Industrial Markering Munagemenf 13, I84 (1984).
Studies,
253
INTRODUCTION
Focus group research is a qualitative technique involving a small number of respondents who discuss selected topics with a moderator for approximately l-2 hours. Respondents are prescreened to ensure that they conform to specified criteria and are invited Address correspondence to: Professor partment. North Texas State University, 76203.3677.
Industrial Marketing 0 Elsevier Science
52 Vanderbilt
Management
Joe L. Welch, Marketing P.O. Box 13677, Denton,
14, 245-253
(1985)
Publishing Co., Inc., 1985 Ave., New York, New York 10017
DeTX
to,a central location to participate in the discussion. In exchange for contributing their time to the research discussion, each participant is given a monetary incentive. Although the focus group technique has been discussed in the literature for over 20 years and utilized for a variety of purposes by consumer goods companies [3], it still has not become a significant tool for most industrial goods organizations. In one study, it was found that 47% of the companies surveyed utilized focus groups to help solve marketing problems. Although 81% of consumer goods companies employed focus group research, only 16% of industrial goods firms employed the technique [4]. It is important that industrial marketing managers understand that the objectives and strengths of the focus group technique are as applicable to the industrial environment as they are to the consumer packaged goods business. It is also important for industrial managers to understand factors that should be considered, as well as costs and problems associated with 245 0019-8501/85/$3.30
the approach. Although some cursory insights have been provided in the literature on the application of general qualitative research techniques to industrial marketing problems, there is little specific direction available to these managers for planning and administering focus group research [7]. The purpose of this article is to provide industrial marketers with an in-depth examination of the procedure, applications, costs, problems, and decision factors in focus group research. PROCEDURE FOR PLANNING AND ADMINISTERING FOCUS GROUPS
Focus groups begin with a specific statement of the problem to be examined. The critical questions that should be answered by the industrial marketing execcutive are as follows: “How will the research findings be utilized”? “ If we uncover certain ideas from the groups, are we in a position to react to those ideas”? Overall, executives must understand why they are conducting the research and how they will potentially behave when presented with the results.
veloped. Also, a moderator’s outline that will be utilized during the focus group interview is completed. This is accomplished through in-depth discussion between clients and the moderator. Insofar as the moderator must pursue important ideas when they are mentioned by the participants, it is critical that the moderator understand completely the client’s business and how the research findings will be utilized. As was pointed out by Miskovic [5], the first rule for clients in conducting focus group research is “get to know the moderator.” Participants are then recruited, and the discussion groups are conducted. Following the group discussion, the moderator reviews the audiotapes and/or videotapes and analyzes the results. The moderator/ analyst not only reports specific comments and findings but also looks for consistent responses, new ideas, concerns suggested by facial expressions and body language, and other hypotheses that may or may not have received confirmation from all of the participants. The point is that the findings should be exhaustively analyzed, and numerous hypotheses should be advanced.
A moderator’s outline for group interviewing must be developed. Step two involves the development of a detailed list of objectives that company executives want to accomplish. In reality, the objectives represent a list of questions the company would like to answer. Input from numerous functional areas should be solicited. Also, once a list of objectives are finalized, they should be communicated to each interested party so that everyone understands what is to be accomplished with the research. After the purpose and objectives are identified, a questionnaire to screen potential participants is de-
JOE L. WELCH is an Associate Professor of Marketing at North Texas State University, Denton, Texas. He was formerly a principal with Savitz Research Center, Dallas, Texas.
246
Finally, a research report is written and presented to the executives. They should be warned verbally and in writing that the findings represent hypotheses and should not be projected beyond the scope of the groups themselves. Figure 1 outlines the procedure for conducting focus groups. HOW MANY GROUPS
TO CONDUCT
The number of focus groups that should be conducted on a single subject depend on several factors: 1. Number of distinct market segments represented in the firm’s target audience. 2. Geographical scope of the firm’s market area. 3. Importance of the management’s decision resulting from the research.
Identify the Purpose and Justificetion for the Study
Specifically State Objectives/flw?stionr to be Answered
I
1
I I
I
[
FIGURE 1.
Write a Sctwening Questionnaire
1
Develop a Moderator’s Outline
I
Review Tapas and Analyze the Findings
Write and Present a Report to Management
Procedure
for conducting
I
I
focus groups
Number of potential participants in a given geographical market area. 5. Number of new ideas generated by each successive group. 4.
One key factor in deciding on the number of focus groups to conduct is the number of distinct market segments represented in the firm’s target strategies. If a company primarily sells equipment to banks, for example, and it is looking for new product ideas for this segment, then the company may only conduct one or two groups of bankers. On the other hand, if the company markets office equipment to small, medium, and large businesses, then it would likely need to conduct several groups of each one of these segments of businesses in order to assess differences in their requirements. Mixing participants from distinct market segments into a single group is not recommended because each person’s segment has different requirements. A corporation that operates in limited market segments may need to conduct only two focus groups. In contrast, nationwide marketers should solicit focus group input from key submarkets within its market areas. Therefore, it may be necessary to conduct eight or ten groups distributed over four or five markets. The size of budgets for marketing research are significantly impacted by the importance of the attendant marketing decisions. In some cases, marketers
are simply attempting to understand a business phenomenon but are not tying important decisions to the research. Generally, two or three groups are adequate for such exploratory investigations. For decisions involving the development of new product ideas, the implementation of new advertising campaigns, or other important decisions requiring a significant expenditure of funds, it is recommended that four to six groups be conducted for each segment. The number of focus groups a company can conduct are often constrained by the size of the respondent population in any given area. For example, a manufacturer of machinery parts for the after market wanted to get input about a proposed sales brochure from distributors who carried industrial parts and equipment. Insofar as there were only a few of these distributors in any given market area, only one group could be organized within a large geographical market. The final and, perhaps, most important factor impacting on the number of groups to conduct is the value of obtaining more ideas relative to the costs of obtaining the additional information. As Calder points out, one should continue to conduct additional discussion groups until the moderator can anticipate what is going to be said. This usually happens after three or four groups on the same subject [l]. It also suggests that at least two groups should always be conducted. WHO TO RECRUIT
FOR FOCUS GROUPS
Identifying and recruiting the appropriate participants for focus groups is one of the most important and difficult tasks. Recruiting is important because it is the key variable impacting on the quality and quantity of response. If the wrong people are recruited, results of the groups can be disastrous. In one case, distributors were recruited for a group to measure reactions to some new product ideas. After a few minutes of discussion, it became apparent that the distributors had little input into the decision to carry new lines of products. In such cases, input from these inappropriate participants is limited and misleading. Recruiting respondents is difficult because the suitability of participants is often not understood until the discussion begins. In the case of the distributors, a screening question was employed to determine their authority to make new product decisions. Although 247
all of the managers indicated that they had primary influence in the decision, in the final analysis, many had only minor influence. Also, research companies often do not monitor the recruiting efforts of interviewers. Interviewers may lead a person into giving answers that may be only if the recruiting job partially true. Furthermore, is particularly difficult, the research company may knowingly invite inappropriate respondents. On the other hand, the interviewers may ask questions appropriately but receive inaccurate answers from respondents. For example, in groups of personal computer users, several people mentioned in the screening interview that they used a Wang professional computer when they actually used a Wang VS word processing system. In contrast to consumer groups, industrial groups include people who have ambiguous titles, diverse responsibilities, and unclear reporting relationships. Also, there may only be a few appropriate participants represented in a market, as in the case of telecommunications managers. Therefore, the indus-
5.
6. 7. 8.
one wants to recruit personal computer users, do not simply ask for the brand and model of personal computers they use. Also ask them to describe the machine and its function to ensure that they are referring to the appropriate equipment. Require that recruiters provide completed screener questionnaires at the end of each day. Check them carefully to ensure that appropriate people were recruited from appropriate companies. When in doubt make a follow-up call personally to confirm the participant. Do not accept a!;sistants to the targeted respondents. Do not accept respondents who have participated in a focus group during the previous year. Have each participant arrive 15 minutes early to complete a prediscussion questionnaire. This will provide additional background information on each respondent, reconfirm their suitability for the discussion, and help the company collect factual information that would otherwise
Continue to conduct additional discussion groups until the moderator can anticipate what is going to be said, trial company that utilizes focus groups should follow eight important rules in recruiting participants. 1. Specifically define the characteristics of people to be included in the groups. 2. Develop screening questions that probe into all aspects of the respondents’ job functions. Do not depend on titles or other ambiguous definitions of one’s responsibilities. 3. Provide the research company with specific company and employee names, when possible. If specific categories of companies are needed, a list of qualified companies is critical. 4. Ask multiple questions about a single variable to validate the accuracy of answers. Therefore, if
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require the discussion.
SELECTING
use of valuable
A FOCUS GROUP
time
during
the
MODERATOR
Selecting a person to moderate the focus groups may be the most important decision made by the industrial organization. In fact, one study found that advertising agencies’ research staffs rated attributes of the moderator higher than attributes of the research supplier or attributes of the report. The four key factors rated by agencies in the study included (1) the moderator’s ability to cover required topics, (2) the moderator’s familiarity with guidelines, (3)
the moderator’s understanding of study objectives, and (4) the moderator’s ability to probe key points made by respondents [6]. The moderator is responsible for helping the client conceptualize the problem, design a discussion outline, and interpret the results. The moderator must also be able to identify opportunities for pursuing ideas that were not anticipated and, therefore, not on the discussion outline. Often, the discussion moves away from the planned outline into other areas of the organization’s business. Although the moderator will not allow these diversions to proceed too far, he or she may recognize that the discussion is related to other decisions the company must make and, therefore, allow the discussion to continue. Therefore, moderators must understand their client’s business and the strategic implications of the focus group research. Moderators do not have to be trained psychologists. Rather, they must be good communicators with the ability to relax the participants and encourage them to candidly share ideas with one another. Moderators must be empathetic and capable of participating in the group without providing biased input or leading the participants into providing a desired response. Moderators must also be familiar enough with industrial marketing management and marketing research to provide an insightful interpretation of the findings and a productive plan for following up the group discussion. Being capable of giving their clients objective, third party input on the implications of research data is a characteristic that may moderators do not possess. However, it is a characteristic that can help clients maximize the value of focus group information. APPLICATIONS
OF FOCUS GROUP RESEARCH
The primary benefit of focus group research is the interaction created by both the setting and the moderator. Because people with common experiences participate in a group, the response of one person stimulates reactions from other participants. The discussion, therefore, evolves into a brainstorming session among participants from which a significant quantity of beliefs, ideas, and attitudes are generated. Focus groups are, therefore, much more valuable as a tool for generating ideas through inter-
actions than as a method for assessing a specific individual’s attitudes. Specific problems that can be studied, utilizing the focus group format, are as follows: 1. A publisher of engineering-oriented personal computer software generates new product ideas by asking engineers to discuss their job functions and the tools that would enable them to perform their job more effectively. 2. An aerospace company asks engineers to discuss factors that are important to them in selecting and retaining their employers in order to develop more creative copy for recruitment advertising. 3. An industrial product distributor organizes groups of customers to determine how they feel about changes in the distributor’s inside and outside sales programs. 4. An industrial cleaning and chemical products company asks maintenance personnel to provide input on a new program for distributing its cleaning products and cleaning services. 5. A major food service distributor measures the reactions of restaurateurs to change.! In its pricing strategy and incentives program. 6. A business computer manufacturer uses focus groups to determine attitudes toward alternative spokesmen for its television advertising. 7. An industrial equipment manufacturer gains insights underlying the responses to a quantitative telephone survey. 8. A motor freight carrier obtains reactions from distribution managers to finished magazine advertisements and the extent to which the advertisements’ meaning was understood and was consistent with the carrier’s image. 9. A manufacturer of dot matrix, letter quality, and laser printers gainspreliminary input on the way in which its target markets are segmented. 10. A manufacturer of telecommunications equipment conducts focus groups regularly to scan the environment for changes in competitive programs, customer needs, economic trends, and technological advances. 11. An oil and gas service company tests alternate logos among its target audience. 12. A textbook publisher queries professors in order to identify special promotional incen-
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tive items that could be given out at professional meetings and mailed to colleges and universities. 13. A manufacturer of personal computers asks business users of personal computers to assist the company in developing an appropriate and functional product package.
As can be seen from these examples drawn from a diversity of industries, focus group research can be utilized to provide insights into a number of industrial marketing problems. The major applications of focus group research are summarized in Figure 2. COST OF FOCUS GROUPS
In contrast to consumer packaged goods research, the cost associated with conducting focus group research in the industrial setting can be high. Not only does the industrial corporation incur direct, out-ofpocket costs associated with conducting and analyzing the research but it also incurs indirect costs associated with coordinating the research company’s activities. Figure 3 details the direct and indirect costs and some normative estimates the marketing manager could expect to incur if conducting focus group research among business executives. The costs may be lower or higher in some areas of the country. Also, discussions with supervisors, secretaries, and lower level managers cost less to recruit and the incentives are lower than they are with higher level executives. On the other hand, costs associated with conducting focus groups with physicians, attorneys, or specialized professionals, such as office automation managers, can cost more than the norms listed in Figure 3.
FIGURE 2.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 250
Major applications
Identifying
FIGURE 3.
Costs of conducting discussions
focus group
Direct Costs (per Group)
Recruiting participants for the discussion groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $750 Renting a focus group room from a local research company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Fee for the moderating, analysis, and report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1000 Fee for designing focus group research and developing a moderator’s outline . . . . . . . . . . 150 Participant financial incentives ($75 X 10 participants) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750 Moderator’s travel expenses ($600 + 2 groups/day) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 Travel for clients to view the groups (3 clients) . . . . . . . . . . . . . . . .._.. . . . . . . . . . . . . . . . . . . 900 Food for clients, moderator, and respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Video taping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 Moderator’s expenses and fee for coordinating respondent recruiting with the research company . . . . . . . . . . . . . . . . . . 100 Word processing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Total direct costs/group . . . . . . . . . . . . . . . . . . . . . . . . . . . $4670 Indirect Costs
Executive time traveling to the focus groups Marketing managers time assisting the moderator develop the outline Executive time formulating the problem and evaluating the findings
of focus group research
and assessing new product ideas.
Making product-related decisions such as packaging, brand name, and logo. Creating advertising themes, copy, and illustrations.
Testing advertising concepts and finished copy. Identifying and assessing sales promotion ideas. Measuring reactions to pricing and distribution strategies. Uncovering competitive programs. Gaining insights about customer decision processes. Generating hypotheses about market segmentation and product positions. Understanding the reasons for answers to quantitative surveys.
The travel costs are difficult to avoid because most companies conduct groups in multiple market areas. Most people agree that it is risky to depend on input from business people in only one market. Because of changes in the business environment from one area to another, it is recommended that the company evaluate regional differences in opinions. The only travel-related cost that can be alleviated is the cost of executive travel to the group. Although it is important to have one client view the group and discuss ideas with the moderator before and after the discussions, having three or four clients observe the group is usually not productive. In fact, because observers are normally not trained to objectively assess the meaning of comments from focus groups and may give too much weight to single responses, their attendance may be counterproductive. It may lead to inappropriate conclusions and generalizations. By videotaping groups and then editing the tapes to reflect the significant findings, one can tell a videostory that captures the essence of the research and requires a minimum of executive time to watch. Videotaping and editing also helps to reduce travel costs.
PROBLEMS
WITH FOCUS GROUP RESEARCH
Although focus group research is an effective research technique for identifying and assessing ideas and marketing programs, it also presents certain problems that users of the procedure should be aware of. The primary problem is overenthusiasm for the findings. Corporate executives should always keep qualitative research data in perspective. Focus groups are valuable for exploring concepts and developing ideas, not for conclusively resolving issues or proving hypotheses. Even if a majority of respondents in six to eight groups agree on an issue, agreement may be a result of group dynamics and not individual evaluation and belief. Furthermore, when designing questions for focus group research, do not write questions that require a hand count. The number of people agreeing or disagreeing with a statement in focus group research is meaningless. If four participants indicate that they favor a new advertisement appearing in a trade magazine and six are against the advertisement, the actual percentage of people responding favorably and
unfavorably in the entire market could be 95% and 5%) respectively. In designing the focus group research, a minimum number of issues should be explored in a single group. Do not attempt to understand the entire world in one group discussion. Select one general topic and several important objectives associated with the topic. By attempting to ask too many questions and solve too many objectives, the company ends up not obtaining good quality input on any of the objectives. The participants should be allowed to discuss and evaluate a subject. They should not be rushed from one question to another. When the company wants to gather a large number of ideas on a diversity of subjects or assess individual responses, it is best to conduct in-depth, one-on-one interviews. In one study, it was found that one-on-one interviews generated more ideas than focus groups [2]. However, the costs of conducting and analyzing in-depth, one-on-one interviews are higher than those of focus groups. Another problem in focus group research is control of recruiting. In industrial groups where obtaining cooperation from participants is difficult, recruiting can become a significant problem. Recruiters will recruit friends, falsely complete screener questionnaires, utilize relatives of the research staff, and recruit professional respondents from panels of respondents that are maintained by the research company in order to reduce recruiting costs. One research manager of a large corporation stopped conducting focus groups in a major southwestern city because he kept seeing the same people in focus groups. Such an occurrence has to be more than a simple accident. To avoid the problem, the client can specify target companies and/or target respondents and also request that each participant be screened to ensure that he or she had not participated in a group discussion during the prior 12 months.
A CASE HISTORY Several years ago, a major computer manufacturer wanted to develop a long-run strategy for producing and marketing a line of personal computers. Executives for this company decided that the key issues that had to be resolved prior to developing a product included (1) the identification of a target audience
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with a need not currently being satisfied by existing equipment, (2) hardware and software requirements of this target audience, (3) training needs of users, and (4) the optimum distribution/delivery system. Although the company utilized a significant amount of secondary data and quantitative research data to identify its target audience, the company utilized focus groups to confirm its findings from the secondary and quantitative research studies. The company recruited and interviewed department managers and office automation managers who utilized personal computers. A wide variety of brands of personal computers and departments were represented in each group. The findings of these user groups helped the manufacturer to understand how decisions were made to purchase brands of personal computers, problems associated with penetrating the targeted group of business users, opportunities for positioning an office system that complemented the users’ existing systems, customer preference for a distribution system, potential market subsegments based on industry applications, and the strengths and weaknesses of competing brands. Although the findings of the groups were not conclusive, they did confirm data uncovered from surveys and enabled the company to delineate a list of hypotheses about the characteristics of a new personal computer system and a potential delivery system. Armed with some ideas for product features, the company conducted several more groups of department managers to obtain reactions to the features. In addition to finding out which features were attractive to business users and which ones were only moderately useful, the company began to understand the important elements of software support systems. Hypotheses about the popularity of software and recommended changes in existing software were subsequently tested in a nationwide telephone survey of personal computer users. After these first two rounds of focus groups conducted in each of four major markets, the company was comfortable with a set of unique product features and several application-oriented software systems. One of the decision areas that was still unclear to the product management team, however, was the feasibility of alternative distribution systems. They were aware of the importance of dealers in distributing personal computers to business users but had
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questions about the most effective way of approaching and selling these dealers. They also wanted to identify support services that the dealers needed and the likelihood that dealers would add new lines and/or drop existing lines to accommodate a new product. Therefore. groups of dealers were organized in four major markets and queried about their relationships with existing manufacturers, procedures they utilize to select brands, and services they perform for business customers. The group data were instrumental in structuring the dealer sales and support program. The company then understood how to approach dealers, at which stage in product development dealers should be involved with the manufacturer, and their sensitivities and needs. The groups also provided insights about how a dual system for utilizing dealers, as well as a direct sales force, could be implemented. The final stage in the research procedure involved interviewing secretaries and training personnel. Input was needed on the types of training programs and tutorials that should accompany a new personal computer system. The adequacy of existing training and attitudes toward several training ideas were evaluated. Also, similar to the special software applications of managers and professionals that had been identified in previous groups, the company ascertained from secretaries their own special needs. With this data, the company was equipped to develop a product package and quantitatively test the hardware, software, and training materials among managers, professionals, secretaries, and dealers. DISCUSSION This article has examined the use of focus group research in the industrial environment. Although the technique provides only tentative insights rather than conclusive facts, it can be a valuable tool for the industrial marketer. Output from this research offers direction to new product development, proand distribution strategies. It motional programs, gives marketers the opportunity to talk face-to-face with the people who are most instrumental in ensurcustomers. Focus ing their future: the company’s group research also gives meaning and support to the often vague, impersonal, and cursory quantitative statistics.
To maximize its value, however, every member of the marketing and management team must understand its applications and its weaknesses. They must also be willing to allocate the time necessary to crystallize objectives and specifically understand how the data will be utilized. In contrast to many narrowly defined quantitative studies, focus group research uncovers ideas that impact on numerous functional areas, thus calling for a broad base of input. If properly applied and thoroughly understood by everyone involved, however, the value of ideas and insights gained should certainly outweigh the executive time and corporate money expended.
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4. Greenberg. Barnett A., Goldstucker, Jac L.. and Bellenger, Danny N.. What Techniques Are Used by Marketing Researchers in Business? Journal of Marketing 41(2). 64 (1977). 5 Miskovic. Darlene, 17, lY80).
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6. Szybillo, George J., and Berger, Robert. What Advertising Agencies Think of Focus Groups, JournalofAdverfising Research 19,3l (1979). 7. Wallace. K. M.. The Use and Value of Qualitative Research Industrial Markering Munagemenf 13, I84 (1984).
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