Market Research Matters

Citation

McGillicuddy, K. (2002), "Market Research Matters", Journal of Consumer Marketing, Vol. 19 No. 2, pp. 173-175. https://doi.org/10.1108/jcm.2002.19.2.173.4

The bottom line: market research truly does “matter” in terms of strategic planning and confronting an ever‐changing and important future. Yet why do the majority of companies and their leaders spend only a fraction of their energy, time, and funding on valid market research efforts? Duboff and Spaeth explore this dilemma in an easy‐to‐read style backed by many real‐life examples and ideas for positive change. The material will inspire managers to take a good look at their own research efforts (or lack thereof), the importance of such efforts, and a variety of tools and areas of inquiry in which to use them. This book is an excellent tool for the manager who is already using market research and wants to improve his or her efforts, but even more useful for the researcher who needs to convince a senior staff that this area of business is vital to growth and even mere survival, and that the department needs a new focus and purpose.

The authors back up every point they make with real‐life situations, which brings the material to life for the reader and provides “ammunition” for someone who needs to do some convincing in his or her own organization. Many of the introductory points are surprising and serve as an excellent foundation for laying the groundwork of strategic market research:

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  Most top executives do not list “understanding the future” as a top priority, and they certainly do not mention market research as a way to accomplish such understanding.

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  Market researchers are rarely included in discussions and planning sessions for formulating corporate strategy.

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  Many top‐level leaders do not even spend time reviewing data on their current customers, let alone data on who the future ones might be.

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  Most executives use market research to support initiatives that have already been planned rather than to explore options not yet thought of.

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  Even companies which support market research usually staff their departments with people concerned with numbers rather than those interested in the meaning of the numbers.

So what does all this mean and what can we do about it? First, we need to recognize that for the most part, our market research efforts are misguided and mismanaged. Second, we need to shape our research efforts toward the concept of “Strategic anticipation”, defined as “the ability to continually assess the environment, particularly focusing on targeted customers, and to act on the signals that change is coming” (p. 9). The remainder of the book goes on to validate that it is this methodology that is vital to a company’s success, and it lists several areas of research that will help companies succeed.

The authors use the first three chapters as a background on traditional market research, how it has been used in the past, and how it should and can be used for the future. The traditional path for market researchers involved gathering data and information, but rarely reviewing the knowledge gained from that data or evaluating the findings. The authors recommend more monitoring and testing of the data in order to form useful and lasting “wisdom”, rather than a traditional gathering and summarization of data in a report. Real‐life examples and detailed explanations of traditional research practices and how these can be revised are included.

The remainder of the book explores how to apply strategic anticipation to research the future of five important aspects of business:

1. 1.

   (1) Brand. The best defense against competition and price wars, brand is an intangible that is vital to a firm’s tangible bottom line. It must be developed, protected and strengthened, and brand research should go far beyond the gathering and tabulating of data regarding customer base and brand loyalty. One must explore these customers’ lifetime values and loyalties, the brand’s communications and distribution, possible extensions in categories or the customer base, and the core differences between one’s brand and others.

2. 2.

   (2) Customers. Although much “lip service” is paid to a “customer focus”, most top‐level managers spend little time reviewing data on customers. Replacing a customer is five to six times more costly than retaining an existing one, making this aspect of business an important one to study. Focusing on the types of customer one already has, creating value for this customer, building loyalty, and prioritizing efforts will help one to truly not only research one’s customer base, but to understand how to keep and grow it.

3. 3.

   (3) Competition. Most research in this area looks at the current competition only and is very focused on current performance and marketplace. But effective competitive research and analysis requires one to “walk in the shoes” of the customer and the competition, researching not only how the competition is doing at the time, but how the customer is reacting and what those reactions may be in the future. It requires one to look beyond the present indicators and ask what forces will drive the future and how one might learn from this possible future.

4. 4.

   (4) Channels. Most companies do not use research to assess channels, as distribution is usually viewed as a “barrier” to getting your product out on the market, not something to be assessed and learned from. Strategic anticipation can help assess one’s channels so that one can anticipate future shifts, gain customer loyalty, and focus more locally, thus effectively using this analysis of distribution to strengthen the business. The authors also describe how to move beyond traditional category management to create a new type of manufacturer/retailer relationship that will strengthen both sides.

5. 5.

   (5) Employees. Rarely the topic of research, employees are actually a key link to customers and will drive the future of creative business thinking. Plus, the effect on the bottom line from high turnover is staggering, yet often goes unnoticed. The authors detail studies finding a strong link between employee loyalty and customer loyalty and, just like customer research, employee research should delve beyond simply exploring “how happy” employees are. The questions of competition, communication and loyalty drivers are key in this area, and will actually help management solve problems rather than simply become aware of them.

The book includes a chapter on “the greatest story yet” of strategic anticipation: the Internet. Important issues to explore include if, how, and why your customers are using the Internet, the attributes of these customers and the competition, an assessment of your current on‐line business, and how to conduct research on‐line. Again, the emphasis should go beyond mere assessment of the present, but move towards identifying the potential opportunities that the research reveals.

In the end, the book details how one might strategically assess either a current market research department or the development of a new one. It details how to properly staff an effective, future‐driven department and the activities they should be concentrating on. The authors admit that, unfortunately, they know of very few businesses in which market researchers play such an integral and effective role in anticipating the future. Their wish is that those who read this book will realize the importance of pushing their researchers to research not only the past and present and everyday data, but to truly research the future and assist in developing the best actions possible to capitalize on that future. The reader is left with a similar wish: that a future‐thinking researcher skilled in the best practices of strategic anticipation might be a part of strategic planning in his or her own organization. Along with the more traditional finance, sales and marketing gurus usually involved in top‐level strategy, these researchers could pave the way to a much brighter and more profitable future for any company.