Getting Serious

8/3/2019 Getting Serious

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Research is the lifeline between companies and custo m ers.So why isn 't it taken m ore seriousiy?By William D.Neal

^ ^ ^ ^ ^ ^ iven all the criticism that's been directed at the field of marketing research over^m ^ H the last decade, I believe it's time to reassert the benefits. Mark eting research is^ H ^ ^ a great profession. It's one where the most curious and creative can find a home^ H ^ ^ H iind be weII-compensated for pursuin g those talents. Of all the business profes-^ ^ H sions, marketing research is probably the most noble. Marketing researchers^ ^ ^ ^ ^ H bring the voice of the customer to the decision-making table. They provide the

information necessary to drive the engine of new and better products and ser-vices that customers need and want. When marketing researchers fail, they have failed to ade-quately represent their constituents.

The marketing research profession is based on science and the scientific method. The fiveactivities of marketing research specified by the American Ma rketing A ssociation (AMA) defi-nition closely parallel the steps in the scientific method, which are the principles and proce-dures for the systematic pursuit of knowledge. (See "The AMA Definition of MarketingResearch" on page 26.)

That basically defines what marketing research is supposed to doapply the scientificmethod to gain knowledge about consumers, buyers, competitors, markets, and marketing.Has ma rketing research fulfilled its man date? M any, both within and outside the profess ion,don't think so. In the Spring 2000 issue of this magazine, Larry Gibson provided an elegantdissertation on what's wrong with the current practice of marketing research and how theprofession has not met its promise (" Quo Vadis, Ma rketing R esearch? "). Admittedly, in the40 or so years between Alfred Politz and current practice, marketing research seems to havelost some of its foundations in science. Researchers have become too long on observation,description, and problem identification and too short on rigorous hypothesis testing, analysis-based conclusions, and accurate predictions.

24 Summer 2002


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E X E C U T I V E S U M M A R YMarketing research is a noble profession that brings the cus-tomer's voice into the corporate boardroom. To carry out thisjob, researchers must be technically competent as well asgreat commu nicators. They are the lifeline to the customer andthe consumer and often end up being the translator betweenthe jargon of the marketplace and the jargon of the organiza-t ion. It isn't always easy, but. when done right, marketingresearch can increase the probability of business success.

W H A T ' S S T I L L W R O N G ?Funding. Marketing research is more often than not under-

funded. I continue to be amazed by companies that areextremely averse to spending $200,000 on researching a newproduct that will cost $40 million to launchthat's 1/2 of 1%of the money at risk. Or why it is so difficult to justify even 1%of the cost of an advertising or promotional campaign on con-ducting pre-launch evaluations of that campaign at the criticalstages of development? There are several credible explanations.

One reason is that marketing campaigns too often take on alife of their own, with marketers' egos and reputations perceivedto be oti the line. To advocates, research is seen as a constrainton their personal prerogatives and creativity. Gunslinger mar-keters and well-trained, methodical researchers do not mix well.

Also, researchers often aren't involved in the early planningprocess for new products or campaigns. Consequently, at thetime of budget development, there's no input from the profes-sional researcher as to what should be researched, how it shouldbe researched, and how much it will cost.

In most companies, spending on marketing research is con-sidered an expense, not an investment in risk reduction. Until we

develop and can agree on measures of return on marketiresearch investment, the marketing research function will cotinue to suffer the fate of short budgets and yo-yo staffing.

Speed. Marketing research is often perceived as being tslow in today's fast-moving business environment. Yes, goresearch does take time, especially research that involves hypoesis testing and prediction. As a profession and an industry, mketing researchers continue to work on reducing execution timBut there needs to he some caution here. Much of the criticismlengthy marketing research results from marketing's reactionanature. Too often, the rush to get new products to market or npromotions launched is the result of poor planning and westrategies. In the long run, both reactionary marketing and reationary marketing research can be fatal to the enterprise.

Just plain bad research. There's still too much "baresearch being delivered to clientsby untrained practitionemanagement consultants, and ill-trained MBAs and marketimajors. This practice has a major negative impact on user orgnizations and greatly depreciates both the profession and tpractice of marketing research.

There are no standards or minimum qualifications for enting the field of marketing research. Anyone can claim to beresearch professional without knowing anything about whacorrect or incorrect procedure. Unfortunately, too many of thpseudo researchers do some really bad research, and the whoprofession gets a black eye for the ridiculous results they deliv

On the other hand, many user organizations hire or pmote unqualified people into research positions because thhave no guidelines on proper credentialsbe it training or exrience. In many firms, completing a single undergraduate couin marketing research is sufficient qualification.More than 50% of the MBA programs in the United Stadon't require a single course in marketing research. Yet a dispportionate number of our clients have MBAs. So the outcomethat the uninformed are directing the inexperienced to do t

The AMA Definition of Marketing ResearchMARKETING RESEARCH is the function that links the consumer,

customer, and public to the marketer through information.

A/VWSCAHy V M R K E T I N G/ 1SSOCMTIONInformation used to Identify and define marketing opportunities and problems generate, refine, and evaluate marketing actions monitor nnarketing performance improve understanding of marketing as a processMarketing research designs the method for collecting information manages and implements the data collection process analyzes the results communicates the findings and their implications


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impossible, with little or no m oney. And, as usual, the researchprofession takes the rap for the usually untenable results.Lack of professional identity. How has this happened? Inmany cases marketing researchers have let the "business" ofmarketing research usurp the "science" of marketing research.Researchers too often let clients do focus groups when they

know they should be doing quantitative research. Researcherstoo often compromise on sampling and sample sizes and engagein a myriad of other compromises to keep the relationship withthe client. Over the years, this has weakened the researcher'sprofessional image among the ultimate users of their product.In many other cases, ill-trained researchers are simply over-stepping their knowledge base and capabilities due mostly to alack of adequate training and experience. The result is thesamea weakened professional image. In too many organiza-tions, marketing research is not seen as a profession, but just astaff function to support marketing. When times get tough, it 'seasily expendable. Organizations see no reason to support pro-

fessional development of researchers because they don't see it asa profession.Many of these issues could be addressed hy having a rigor-ous certification prog ram in place. A com prehen sive, well-publi-cized, volunteer certification program would establish the fieldof marketing research as a recognized profession and do muchto alleviate current dilemmas. (See "Benefits of Certification" onpage 28.)WHAT'S GOOD?But in spite of these shortcomings, where would marketinghe without marketing research? I t ' s quest ionable whether thefield of marketing would continue to exist without the science ofmarketing research to underpin it. In his book Kotler onMarketing: How to Create, Win, and Dominate Markets (FreePress., 1999), Philip Kotler stated, "Research is the starting pointfor marketing. Without research a company enters a market likeL hiind man."

Looking back over the last 40 y ears, marketing research onthe whole bas contributed significantly to business success,espite some very public failures. Investments in marketingresearch have continued to increase far above the rate of infla-tion, and operational marketing managers depend more on mar-keting research to reduce the risks in undertaking new market-ing initiatives.Voice of the customer. More than ever, businesses and otherinstitutions are measuring and monitoring customer satisfactionnd loyalty on a continuous hasis, using that information toimprove processes and stem defections. Many are doing it in

oyalty researchbadly designed surveys, inaccurate measure-ents, and little comparative analyses. Yet, 15 years ago, veryittle customer satisfaction and loyalty tracking research was

ehavioral loyalty. Clearly, both the organization and the cus-

Management metrics. Slowly, but surely, marketing researchis beginning to provide some of the key metrics to senior man-agement. Long the exclusive territory of the purveyors of finan-cial numbers, management metr ics are beginning to includemarketing componentsbrand health measures, changes inbrand equity, advertising and promotional effectiveness mea-sures, indices of customer satisfaction, and several other mea-sures of marketing impact. In a few major firms, even the hoardsof directors are receiving limited marketing metrics. These mea-sures don't yet have the same authority as (or perceived preci-sion of) the financial numbers, but that's gradually changing.

Target marketing. In the '90s, market segmentation experi-enced a rebirth that continues today. Business managers haverelearned the benefits of target marketing. Most marketers nowrecognize that simplistic segmentation schemes based on demo-graphics, geography, or SIC codes are suboptimal at bestanddisastrous at worse. Consequently, more sophist icated marketsegmentation procedures, all research-based, are providing tbebasis for many new and innovative marketing pro grams targetedto ever-smaller and more diverse segments. The outcome hasbeen improved marketing efficiency and higher profitability forthose firms that do it right.

New products. Research bas often been blamed for the his-torically abysmal rate of new product failures. However, someof the more recent investigations into new product failures tendto exonerate at least some of the research. More often, the fail-ures occur because (1) there were inadequate investments inresearch, (2) the research was ignored, (3) what was researchedwas not what was launched, (4) there was inadequate marketingand promotional support, or (5) there was inadequate sales orfulfillment support. We have several new tools for testing newproducts, f rom concept to pre- launch. When used properly,these newer tools greatly reduce the risks inliercnr in a newproduct launch and accurately predict trial and repurchase ratesunder different levels of marketing support. We still have a con-siderable ways to go. Too many companies still under invest innew-product research and cling to familiar, but often inade-quate, ways of doing it. Only well-supported and well-designedresearch holds the promise for significantly reducing the newproduct failure rate.

Branding. After the branding debacles of the ear ly '90s,many firms began to recognize their greatest asset is tbeirbrands. Unlike any other aspect of the marketing mix, brandsrepresent a comp one nt of value that can ' t be replicated by acompetitor. Thus it represents a unique, defensible asset for theowner and a launch pad for new product development anddeployment. Unfortunately, branding has long been resistantto the imposition of scientific investigation, relying too muchon the creative ar ts of advert ising and promotion. But that ischanging. There are now several research-based models formeasuring brand value and brand equity and uncovering theirkey drivers. Quantifiable changes in brand equity represent theult imate measure of return on marketing investment. As theseresearch-based tools for measuring brand equity continue todevelop, we have the opportunity to counterbalance the domi-nance of short-term financial metrics with the long-term brandequity metrics.


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Basic training and education. The Principles of MarketingResearch Program, sponsored and underwrit ten by theMarketing Research Institute International and the University ofGeorgia's Center for Continuing Education, provides a universalplatform for teaching the basics in the field. It's available world-wide both online and offline. This inexpensive but rigorous pro-gram has 10 modules that provide training in the fundamentalsof marketing research. The program has been endorsed by theleading marketing research organizations worldwide.

Benefits of CertificationA comprehensive, wel l -publ icized cert i f icat ionprogram would providea signal to the entirebusiness community thatnot just anyone could domarketing research, Goodresearch takes a trained,experienced professional. Inaddit ion, cert i f icat ion would improve the practiceof marketing researchby promoting the corebody of knowledge imbedded in the Principles ofMarketing Research Program that can be studied andmastered by those wishing to practice in the field improve the practice of marketing research by promo t-

ing a set of ethical standards to which those in the fieldwould adhere prov ide a visib le signal to employers that the researcher

possesses the basic know ledge a nd exp erience to prac-tice the science

help strengthen the relation ship betwe en purchasersand providers of marketing research services by provid-ing a common knowledge base and a common code ofprofessional practice

assist professionals, espec ially younger professionals,in plan ning their career

improv e the image of ma rketing research in the eyes ofexternal constituenciesconsumers, the businesspress, the courts, gov ernmen t, an d business managers

For more than 20 years the profession has had the benefitmaster's-level education in marketing research. At least four ferent universities now offer a master's degree in the field. Eyear these programs, combined, graduate 70 to 80 well-ecated, hijfhiy motivated professional marketing researchThat's probably not enough, but it clearly sets a great standaProfessional development. The industry and the professsupport a large number of professional development conferenand training programs in marketing research offered by prosional associations, major research-oriented universities, anfew for-profit organizations. These programs teach and demstrate the latest developments in emerging techniques aresearch methods and are well-at tended by practicresearchers. Notable among these are AMA's semi-annApplied Research Methods Conference, annual MarketResearch Conference, Executive Insights Conference, Advanced Research Techniques (ART) Forum. Annually, thare at least 50 conferences and training programs in marketresearch held in North America alone. The sheer diversity

these programs assures us that the field continues to he vibrand ever more relevant to business success.New methodologies. The marketing research industry been quick to develop new research methodologies that provmore realistic and more scientific research approaches and odeeper insight into buyer behavior. Many of these newer methologies provide predictive models of buyer behavior under alnative scenarios. Conjoint and discrete choice models, hierarccal Bayes models, artificial neural networks, survival analylatent class models, structural equation modeling, and the lare now accepted tools in the researcher's toolbox. Researchcontinue to develop and refine these new methodologies. Thdevelopments are the result of a strengthening interface betwacademic marketing researchers and practitioners.Technology. The marketing research industry also has bquick to adopt new technologies and use them to do hetmore cost-effective, and more useful research. Over the yearshave seen the easy adoption and refinement of computer-assistelephone and personal interviews, disk-by-mail data collectmixed-mode data collection methodologies, and special-intepanels. Although there are still fundamental questions and ccerns about Internet sampling and representativeness, it seeonly a matter of time before those concerns are adequataddressed and Web-based survey research will become norm, not the exception.

THE BOTTOM LINEAlthough there's certainly room for improvement, bothprofession and the business of marketing research are mofulfilling their major rolebringing the voice of the customethe forefront of husiness decisions. Marketing research remamore science than art, and the strengths vastly overshadow weaknesses. Regulatory issues and privacy concerns still looma threat to our practice. But, on the whole, we remain a noprofession tha t does far more good than harm.

provide a professional identity for both those in the pro-fession and those w ho use the services of the profession William D. Ncal is founder and senior executive officer of SDRConsulting in Atlanta. He may be reached at [email protected]


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Getting Serious