Everyone in business does Market Research.
Some even pay for it. Whether you are an experienced and
sophisticated marketing manager or a startup trying to better meet your
customers’ needs you need to make sure that you are asking the right questions.
My favorite story in this
regard comes from Sergio Zyman’s book
“The End of Marketing as We Know It”. As you likely know, Mr. Zyman was, for
many years, the Chief Marketing Officer of Coca-Cola Ltd. His tenure included
that legendary marketing mistake, the New Coke fiasco when they “improved” the
ninety year old Coke formula and “relaunched” the brand with the new product.
Consumers, of course, were outraged, the company was humiliated and within the year
they reversed course and returned to the original formulation.
Mr. Zyman explains in print
how the marketing team did extensive market research to inform their business
decision (no kidding!) and they felt certain that the new formulation was
preferred by both competitive users and current users. He distills his mistake
this way: “we asked them ‘what would you do if we gave you [this] product as
Coke? They told us, ‘they would buy it’. We didn’t ask The Question…‘if we took
away Coca-Cola and gave you New Coke, would you accept it?”
If those smart, experienced and well-resourced people in Atlanta can get it wrong…well, anyone can. To get it right you need to do what I do at the outset of every research project, a Strategic Research Review. By doing it you will a) save money by avoiding useless research that you don’t need b) ensure that your research is relevant and has a high value to the business c) enjoy the long term benefits of making smarter decisions.
Like most “problem
definition” documents the SRR is neither easy to do nor easy to explain. It is
not something you do perfectly; it is a continuous improvement thing.
Experience helps. Despite the obvious challenges I want to give you a sense for
how you can ensure that you have done your homework prior to implementing
market research.
Why do we need research?
This is relevant background.
It has to describe the business situation and category dynamics that have
created the research need. It should demonstrate that you have identified what
you think is the root cause of the business problem. To do that it usually breaks
the problem down into its component parts.
Example: Brand X is getting squeezed in the
yogurt category between a local brand with superior quality and a global brand
with extensive innovation across flavours and formats. (and so on)
What relevant research has already been done?
What is that George Bush-ism
about “known unknowns and unknown unknowns?” Previous research is a “known
unknown”, that is, there is almost always something useful if you are willing
to look carefully. Articulate a concise summary of what you learned and note
the studies for future reference.
What are the business decisions to be made with the research?
Clear links to the decisions
to be made are your security against useless research. Articulate realistic and
accurate aims for the research. There may be multiple decisions to impact, but
it is important to convey their priority. There is nothing wrong with having
secondary decisions, they can be handled on a “nice to have” basis.
Some projects are suited to
“decision choices” i.e. the brand needs to do A or B depending on if the
research outcome is 1 or 2. These
decisions should relate to the components of the problem outlined earlier.
Example: Yogurt Brand X needs
to choose where to focus investment and how best to position
the brand to win in those segments versus competitors.
What are the research objectives?
What are the specific
questions, the things you want to learn? What information would enable you to
make the decisions? You can frame them as questions (How do consumers switch
among the various brands?) or as information needs (Determine brand
interaction). This section will also convey exactly whom you want information
from. Again, it is important to convey the priority of the various objectives. “Self
reported media habits” may be nice to have, but brand image perceptions would
be critical. This is where the new Coke team failed to pull out the precise
question that related to the specific business problem.
Example:
To understand yogurt
consumer purchase habits in terms of frequency, location of purchase, formats,
brands, container size.
To understand consumption
behavior in terms of who consumes the product and the type of occasion.
What is the expected use of the results?
This section articulates
specifics of how will the research information help with the decisions? It may
not be required for simple projects. For others, however articulating specific
analyses and uses ensures that you are getting the right data.
Example:
To develop an in-depth
profile of the yogurt purchaser, particularly the heavy purchaser both for the
category overall and for the most profitable yogurt formats.
Once those questions have
been answered, only then can you start
designing a methodology. In general, there is far too much attention on
innovative methodologies (MRI scanning? Sentiment monitoring?) and not enough
focus on defining the research problem. The
issue is exacerbated by research suppliers who are selling off-the-shelf
“products” that are standardized and easily executed by relatively junior
staff.
What happened to poor Mr. Zyman? Well he had
to leave in disgrace a year later…but he may have been out to prove something. He wrote a bestselling book , started Zyman
Group consulting, sold it seven years later to MDC for $64million and was hired back at Coke as CMO for 3
years. It seems he did okay… once he learned to ask the right questions.
Luckily, I have not sold out yet – just call or email.
