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Stephen King
25 February 1931 – 16 February 2006
Two basic criticisms of
market research: (i)
An over-reliance on data/reluctance to use judgement:
“…..I believe that part of our national failure to
innovate has come through trying to use market
research not as an aid to innovation, but as a
system that ideally reduces all personal
judgement to a decision as to which of two
numbers is the larger”
- Stephen King (Research for Decision Making 1983)
Two basic criticisms of
market research: (ii)
The best decisions are made based on a range of
sources:
“….The winners of the IPA Effectiveness Awards
show how market research is used at its best.
I don’t think a single entry relied on just one
measure of how advertising works. What the
judges were looking for was a convincing argument
based on the interpretation of many different forms
of research.”
- Stephen King (Research for Decision Making 1983)
Once upon a time
things were different:
“Just over 80 years ago our industry was founded by
two pioneers: Art Nielsen and Daniel Starch... They
were consultants and they based their consultancy
service on the hard data they derived from consumer
research... These two men operated at the highest level
and were trusted gurus to the men they served... Even
as the nascent science of market research grew in the
1920s and 1930s, it retained its position in the rarefied
atmosphere of consultancy to the top decision makers
of industry... The trend since, of course, has been
almost invariably downward.”
- Simon Chadwick 2006
Full Circle into the Future
How market research can enhance its value
for 21st century marketing companies
Judie Lannon
Merry Baskin
From backroom
to boardroom
• One of the longest running debates in
market research history
Are we analysing the issue correctly?
Why isn’t MR as valuable
as it should be? After all….
• More and better techniques and methodologies
• Closer to the consumer
• Branded and segmented
(a mixed blessing)
Theoretically MR should be more
valuable than ever before
So, what holds
the industry back?
• Structure: vertical integration rather
than partnerships and cross-disciplinary
teamwork
• Attitudes: obsession with craft can
overshadow meaning and utility
• Mentality: consultant vs. vendor
Consultant
• Presents new knowledge
of client business;
how to improve it
• Casts client problem
in financial terms; what
problem is costing client
• Speaks business
language:
– Client’s business
functions
– Client’s competitors
– Client’s benefits
– Client’s value & profit
vs.
Vendor
• Presents knowledge of his
own products & services
and how these may be
useful
• Depends upon client to
identify the problem for
him, usually in non financial
terms
• Speaks sales talk:
– How vendor operates
– Vendor’s competitors
– Vendor product features
– Vendor pricing &
discounts
– Alex Biel 1998
But the real barriers to valuing
market research lie elsewhere:
In marketing itself
Researchers constantly
ask themselves:
what do marketers want
from market research?
This is the wrong question
The question isn’t ‘what do marketers
want from market research?’
but
‘what do CEOs want from marketing?’
A decade of attacks on
marketing from many quarters
“Marketing is being challenged in the executive
suites of organisations around the world.
Marketing leaders bemoan their loss of prestige
and power in senior management ranks of top
organisations. Today marketing in many
organisations is only peripherally involved in
major organisational decisions”
– Schultz et al 2004
No clear definitions:
what exactly IS marketing?
12 different answers
•
•
•
•
•
•
Market research
Consumer communication
Key account management
CSR
NPD
Internal marketing
•
•
•
•
•
•
Pricing
Marketing fund allocation
Distribution strategy
Corporate image and reputation
Sales staff
Shareholder communication
– What do CEOs Want From Marketing? Marketing Society/McKinsey 2004
Unclear Expectations
“A number of CEOs admitted they had not
made their expectations clear as to what
marketing should deliver. This ambiguity is
exacerbated by a lack of accountability from
marketers themselves and a lack of proven
models and processes consistently applied”
– Marketing Society/McKinsey 2004
Reputation of
marketing directors:
At best
• Creative
• Committed
• Hard working
• Inspiring
• Essential
• Passionate
• Talented
At worst
• Undisciplined
• Not value-oriented
• Inconsistent
• Self-important
• Not commercial
• Narrow
• Not accountable
- Marketing Society/McKinsey 2004
High Churn Rate
Tenure of CEOs vs. CMOs
CEO
CMO
54 months
39 months
– Spencer Stuart 2006
Counterproductive
organisational structures
“Organisational structures bear a great deal of the
blame. Too many companies structure according to
function which emphasises specialized knowledge
and skills determined by what can often be a series
of rigid silos. If marketing is vertically organised as
a department it will inevitably be seen as what a
department does rather than what the organisation
does”.
– Don Schultz 2004
Dominance of finance
“Now that CEOs have squeezed all
the value they can out of the
distribution chain, they are turning
their guns on marketing.”
– Shaw 2005
Furthermore:
• Too much data, not enough
insight
• The dead hand of procurement
• Poor recruitment and training
Strategy
Management Consulting
Marketing Consulting
Research Consultants
Marketing Research Firms
Internet Collectors
CATI Centers
Direct Marketing Firms
Call Centers
Data
– Alex Biel 1998
Marketing is at a turning point:
the future will look very different
• Brands and branding are now accepted
and valued constructs
• CEOs are requiring marketing to be more
accountable
• Organic growth and innovation are top priorities
• CEOs are looking for a new breed of ‘Super
CMO’
• The rise and rise of Consumer Insight
…people/departments/role
What’s right:
theory and practice
From P&G’s recruitment ad (Consumer and Market
Knowledge):
“CMK’s role is to create a competitive advantage for P&G
through superior consumer and market understanding.
This brings consumers to the center of P&G’s business
decision making.
• …an integral part of multi-function business team
• …like an internal research and business strategy
consultant
• …will influence diverse business partners within P&G
and find creative solutions to business issues”
8 Proven steps
to making it work:
1. A clear vision that is comprehensible to non-researchers
and marketers
2. A senior champion of change
3. A dynamic department leader to evangelise and make
things happen
4. Existing staff have to want to change
5. Commitment to internal training programmes with marketers
6. Essential to have buy-in of Marketing
7. Needs a lot of people – losses from Brand Management
8. You have to DELIVER in a short period of time
– Michael Harvey, Global Consumer Planning Director, Diageo
Problems that currently exist
but we believe they will
eventually be solved (1):
Still too low in status, still too
poorly connected:
“…In practice, MR isn’t at the top table
…leaders are low ranking vs. other disciplines
… ‘insight’ is a word attributed to a decision that
was expedient
…investment in research is not a priority’”
– Consumer Insight Director
Problems that currently exist
but we believe they will
eventually be solved (2):
Turf wars and internal politics:
… “Marketing managers and directors are
politically savvy and protect their connections.
They don’t want Consumer Insight stealing their
thunder or limelight”
… “Clients are very silo driven. It would be nice to
think there was some very powerful insight person
who was incredibly well connected with all the
important people who are making the big decisions”
- Consumer Insight Director & Research Agency Director
Problems that currently exist
but we believe they will
eventually be solved (3):
Cosmetic change of name
but not of function:
… “Most market research clients DO still think
their job is to process work that the MR agency
has done… de facto traffic men between the
research agency and their own marketing client”
- Research Agency Director
Problems that currently exist
but we believe they will
eventually be solved (4):
The wrong type of people:
“Client researchers turned Consumer Insight
Managers often come from research companies
and their most salient skill is getting it done;
they like the tidy, timely management of projects
and care about the use and misuse of data”
- Consumer Insight Director
How researchers can move more
forcefully into consultancy mode:
External world
•
The new challenge of managing a total brand
communication strategy.
“The big (above the line) advertising campaign model has
changed and nobody knows how to measure the new stuff
as part of a totality so we’re all on an equal footing”
- Research Agency CEO
•
Driving growth and competitive advantage
“Researchers could do themselves a huge favour by
developing new and/or more effective ways to discover
competitive advantage. We need to be more explorative
and brave”
- Planning Director
How researchers can move more
forcefully into consultancy mode:
A new role internally
• Helping to evangelise marketing in the
company: over-coming silos, uniting different
departments under larger marketing projects.
• Measuring marketing. Marketing MUST be
more accountable. Market research can help
develop dashboard metrics.
What should be done?
Individuals
• Get out more
• Join a wider network of
organisations and groups
• Read a wider range of journals and
books
What should be done?
Companies
• Recruit more widely: Look for people
accustomed to working in a creative
environment such as planners, exconsultants
• Train more broadly
• Offer exchanges and internships with clients
• Get to grips with your own internal silos
• Sharpen your positioning
• Examine your literature and re-write a lot of it
What should be done?
The Market Research industry
Take the issue seriously – at most: - “a more
substantive change of business model is
needed’
- Simon Chadwick
At the very least, if researchers are integrating
other data, - “develop a guide (or Charter) to
understand how to evaluate the quality of this
more 'holistic' offer.
- David Smith
In the meantime,
the MRS should:
• Take a hard look at the
training programme
• Build relationships with other
training bodies –
IPA, APG, CIM, MS
Conclusions
• We firmly believe the future is bright for
market researchers who genuinely want
to engage with the marketing
challenges companies face.
• But it requires a completely fresh look at
how successfully the industry is in tune
with the way companies are evolving in
the 21st century.