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Marketing Research of BJ Services Company -
March 31st, 2011
BJ Services Company was a oil and gas equipment and services company that is now a subsidiary of Baker Hughes.
It was founded in 1872 as the Byron Jackson Company by inventor Byron Jackson and at its peak operated in more than 50 countries worldwide.
BJ Services Company is a leading worldwide provider of pressure pumping and oilfield services for the petroleum industry. Pressure pumping services consist of cementing and stimulation services used in the completion of new oil and natural gas wells and in remedial work on existing wells, both onshore and offshore. Oilfield services include completion tools, completion fluids, casing and tubular services, production chemical services, and precommissioning, maintenance and turnaround services in the pipeline and process business, including pipeline inspection.
On April 28, 2010, the company was bought by Baker Hughes in a $5.5 billion stock and cash deal. Greenhill & Co. advised on the transaction
Langerak et al. (1999) and Millson et al. (1992) argue that creating customer value should be the focus of new product development efforts. There focus on the customer involves doing marketing research to confirm market acceptance and identify product requirements and design. Karagozoglu and Brown (1993) indicate that majority of firms involve customers in the development phases of market process as it permits the greatest leverage of customer information. The undertaking marketing research with or about customers is critical to reducing new product development marketing ways.
Why the telecommunications industry?
There is faster new product development is important to many firms, particularly those in dynamic and hostile environments (Calantone et al., 1997; Kessler and Chakrabarti, 1996). One industry, which is currently operating in such an environment, is the telecommunications industry. The signing of the Telecommunications Act which prevented local phone companies, long-distance companies, cable TV and wireless service companies from entering each other’s business, the companies are able to bundle variety of services and, more importantly, make significant progress toward building high-speed information highway, which can transmit voice and video communications by entering markets previously closed to them. How has deregulation changed the telecommunications industry? It has increased competition, as companies from different industries and different parts of the world vie for position in this diverse industry. Deregulation has led to the development of competing products and technologies in an attempt to be at the forefront when standards are established.
Telecom firms that face such highly competitive and dynamic environments are predicted to face greater pressure to bring products to market faster than those that operate in more stable and static environments (Calantone et al., 1997; Kessler and Chakrabarti, 1996). Moreover, in recent study, Ittner and Larcker (1997) suggest that more research is needed on the relationship between various marketing practices and strategic cycle in diverse technological and competitive settings. Thus, focus on UK telecommunications industry as dynamic paced industry that has seen ever-shorter product life cycles in recent years. Given these characteristics, the usage of marketing research in developing marketing strategy may prevent or reduce the need for multiple and lengthy tests of individual marketing strategy elements such as packaging, pricing, advertising, brand name. The below illustration is an example of marketing stance of EU telecommunication industry in which UK is a part respectively.
As the link between the survey and the respondent, the interviewers are an integral part of the process and great care is taken to train them, monitor their performance and provide them incentives for doing good work.
“When we started a year ago we had a response rate of 44 percent and now it’s up to 52 percent and every quarter it is improving. The interviewers play a key role and they are probably one of our big strengths,” Perroud says.
“It is very important that they are smartly-dressed and professional in appearance. And they have to be very easygoing with other people. They are given a script to follow as a guideline but we encourage them to sound as natural as possible and not merely recite the words.”
Perroud and other GAP representatives visit the airports to meet with the interviewers. In addition, PRP sends them a quarterly newsletter showing how they and their airport performed compared to others. “We do some contests on the response rates, not on how many surveys they distribute but how many completed surveys they get back. We rate the airports and the interviewers and the three best interviewers [globally] get a check.”
Lai says there are two main service issues facing airlines today. One is operational reliability – arriving and departing on-time, not canceling or delaying flights. “We have found that that is one of the greatest drivers of satisfaction, especially for domestic service,” he says.
The second is the interaction between airline employees and passengers. “This is more a dissatisfier than a satisfier,” Lai says. “By that I mean people take for granted a basic level of civility from the staff, whether it’s the reservation agent or gate agent. If a representative has an attitude problem, and if a customer doesn’t feel special, isn’t given the basic courtesy of a smile or a sorry or a thank you, they can become angry.”
In Delta’s case, with 78,000 employees, Lai says the question is, how do you manage and motivate them to give great, consistent customer service day in and day out? That human element is not as immediately controllable as on-time performance or the quality of in-flight meals. Measuring and monitoring customer service is part of the job of marketing research.
Lai says the GAP study provides good information on how Delta’s SkyTeam partner airline Air France is doing. “That does not replace the need for doing alliance-specific research with Air France and other partners but [the GAP study] certainly gives us a good idea of how they are perceived by their customers.”
The information from the GAP study affords Delta a one-of-a-kind competitive view, Lai says. “You have to put your performance into perspective, into the context of the other airlines. You might look at your own results and say things are stable or improving compared to last year. But if you find that your slight improvement actually puts you a few notches below other carriers, that is quite a different story. So the information we get from the GAP study is unique and invaluable in that sense.”
CHARACTERISTICS OF GOOD
Following are the characteristics of good marketing research
Scientific method. Effective marketing research uses the principles of the scientific method: careful observation, formulation of hypotheses, prediction, and testing.
Research creativity. At its best, marketing research develops innovative ways to solve a problem.
Multiple methods. Competent marketing researchers shy away from over-reliance on any one method, preferring to adapt the method to the problem rather than the other way around. They also recognize the desirability of gathering information from multiple sources to give greater confidence.
Interdependence of models and data. Competent marketing researchers recognize that the facts derive their meaning from models of the problem. These models guide the type of information sought and therefore should be made as explicit as possible.
Value and cost of information. Competent marketing researchers show concern for estimating the value of information against its cost. Value/cost evaluation helps the marketing research department determine which research projects to conduct, which research designs to use, and whether to gather more information after the initial results are in. Research costs are typically easy to quantify, while the value is harder to anticipate. The value depends on the reliability and validity of the research findings and management's willingness to accept and act on its findings. In general, the most valuable information tends to cost the most because it requires more intensive methods, but of course it is easy to spend a great deal of money on poorly conceived research.
Healthy skepticism. Competent marketing researchers will show a healthy skepticism toward assumptions made by managers about how the market works.
Ethical marketing. Most marketing research benefits both the sponsoring company and its consumers. Through marketing research, companies learn more about consumers' needs, and are able to supply more satisfying products and services. However, the misuse of marketing research can also harm or annoy consumers. There are professional ethical standards guiding the proper conduct of research.