The Wise Research Buyer. An Appreciation of what MR can ;and can't do !

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Information about The Wise Research Buyer. An Appreciation of what MR can ;and can't do !

Published on March 8, 2014

Author: MuderChiba



A Powerpoint rendition of a 2-part article which appeared in BrandWagon of The Financial Express a few years ago. It uses cases to chart the journey of a pessimistic research buyer to becoming a Wise Research Buyer.

THE WISE RESEARCH BUYER An Appreciation of what MR can ; and can’t ! Muder Chiba 1

2 PROVENANCE • This is a PowerPoint rendition of a 2-part article which appeared in the BrandWagon supplement of The Financial Express in 1998.I did not get around to penning the 3rd part which was to be on agency and proposal selection; and on awarding and running the job. Just as well! • These articles focus largely on the attitude one needs to carry into using MR well. I used real-life cases to mark the transition of a research buyer to a Wise buyer. I started off on this thinking the cases would seem very dated but they seem to be doing the job even now! Have kept away from adding on from my now expanded repertoire in this presentation. • Also surprisingly the other articles in the supplement seem so ‘now’…Shahrukh Khan’s choice as the face of Santro , Marico’s intent to expand and to take Parachute wherever coconut can take it , and an adman’s report from Cannes! Muder Chiba

3 MR- THE SHARP EDGE OF DECISION-MAKING Marketing Research even today is an esoteric activity; to a number of marketers who use it, too. Burgeoning competition has resulted in more and more marketers turning to this tool to aid in marketing decisions. A real and true appreciation of market research and what it can do, and more importantly, can’t do- can sharpen the wise marketer’s decision-making acuity. This appreciation would be the key to wielding MR successfully as a weapon in his marketing wars. This would forge his attitude to MR and resultantly the sharp edge to his strategic choices. What attitude does the Wise Marketer carry into the conduct of MR? Can you sit back after briefing the MR agency and except a shining bright winning strategy to emerge? The numbers can’t be wrong?? Muder Chiba

4 OPTIMISM VERGING ON BLIND FAITH ? The case of the Optimistic Buyer The major tea brand marketer went ahead with a huge media spend on an ad which every one felt wasn’t working. They went ahead with the spend in spite of the fact that everyone- the sales team, distributors, retailers, senior managers, and their wives not getting ‘anything’ from the commercial after the initial airings. This decision was based on the numbers thrown up by the friendly neighborhood MR agency from a pretest in a representative small town in Uttar Pradesh. The commercial bombed*. NOT WISE, OTHERWISE * There’s a great epilogue to this case not relevant to this presentation though. Muder Chiba

5 A CASE OF EXTREME PESSIMISM ? The case of the Pessimist CEO A very senior and accomplished CEO of an automotive product company had this to say about a study where focus group discussions were mooted by the vice- president – marketing and the MR agency with the concurrence of the ad agency – “With reference to a brand of car, for example, what can you tell me? Sab kuch bajta hai is car mein, sivai horn ke (everything except the horn makes a sound in this car) .I know that- I don’t need research. It’s fancy”. NOT WISE, OTHERWISE Muder Chiba

6 THE WISE MARKETERS REALISM What one needs to bring to MR is a dose of good old-fashioned realism. The market researcher can’t tell the marketer his business. She can only sharpen his decision-making. The decision is to be taken by the marketer not by the data. The data can be used as the apocryphal man in control of his faculties uses a lamppost- for illumination; or as a drunk uses it- for support. The data is there to guide, to illuminate and to inform. And this may mean at times giving precedence to the marketer’s subliminal impulses of ignoring apparent directions thrown up by data. Muder Chiba

7 WISE RISK-TAKING? The Case of the Wise Risk-taker Consider the marketing manager of a leading paint company. A firm proponent of researching every issue. Pretesting every advertisement and periodically mapping the market. The creative agency came up with a series of ads, which were very creative and stood the paint advertising logic on its head. There wasn’t too much ‘rational’ logic to those ads. The manager however felt strongly that the ads were just ’right’. The MR agency and the manager felt that the ads would be ‘killed’ by a ‘logical’, linear research approach. The decision, taking into account various factors such as the current status of the brand and the splits available in the media, was not to pre-test the ads, to release them. Take the proverbial marketers risk. To hedge his bets, the manager did commission an immediate post-test. Sometimes the best decision that the realistic user of market research can take is some thing as extreme as not testing. And sometimes the best decision would be to pretest an ad/concept at every stage. That particular campaign was a thumping success and brought in almost immediate demand attributable to the ads. WISE Not OTHERWISE. Muder Chiba

8 WISE RISK-TAKING? 2 Another tale, perhaps apocryphal which readily comes to mind is “the birth of the Walkman” - where the manager reportedly ignored final recommendations coming out of millions of dollars of MR which said that a ‘tape-recorder’ that doesn’t record is a no-no. He probably saw something in the volumes of data/ information presented to him which, processed by his marketer’s judgment, led him to come to another conclusion – something that made marketing history. WISE, Not OTHERWISE Muder Chiba

9 WHEN TO RESEARCH? Let us compare two businessmen- One, operating in the quintessential Indian village, running a general provision store. And another operating out of a metro- setting up retail provision stores in a large number of towns and cities across the country. The Village grocer personally knows all his customers, their credit rating and their purchase foibles. He is able to process this data on his own because of the limited number of people he deals with. He is his own MR, intelligence and credit rating agency. The success of his business is built upon on this knowledge of his customers. The Metro businessman on the other hand is dealing with vast bodies of consumers, most of whom he will never know personally. He needs to have the same understanding of his customers as the Village grocer. The only way to obtain this is recourse to scientific methods of data collection and analysis – MR. The decisions on what all the stock, when to reorder, how to promote, which new product to put on the front shelf, which of the brands to go with, would yet need to be taken by the Metro businessman using his marketer’s judgment. The same as for the Village Grocer, except for the fact that the Metro Businessman’s scale of operations makes the cost of an error very high. This then is the nub of the issue. The chances of making an error in judgment because of dealing with bodies of consumers who the marketer doesn’t know, in places he’s never seen, in situations he’s never been. And the cost of the error. MR then is to be used to reduce the chances of making an error. And the decision to research or not to would depend on the likely cost of the error. If the error in judgment is likely to prove very costly either in terms of customers lost or launch momentum loss or ‘corporate objectives’ loss, then the decision to research at every stage of the product / brand/ market development process would be valid Muder Chiba

10 WHEN TO RESEARCH? 2 Take the case of the MNC relaunching a toothpaste brand years after it had disappeared from the shelves. The costs of this relaunch were dauntingly high considering a market with well entrenched brands accompanied by high decibel advertising and deep distribution. It decided to research at every stage testing the product per se, the branded offer, the advertising, and the total offer. The costs of such intensive research were justified in view of the need to get it right the first time as the immediate loss due to failure of the relaunch were very high. Also there couldn’t be another relaunch if this failed. Whereas, another major marketer getting into the branded spices market a few years back, went in for intensive MR in response a corporate policy decision. It undertook a full test market in more than two cities in two zones. Then it undertook a full-scale research study, not just to understand the reactions to the launch but also to actually get a fix on the likely market share and resultant volumes they were likely to garner in a particular time frame. This information was used to work out the financials of the project. This was in view of a corporate directive that the project had to break even in a particular time frame, else the company would not enter the area. In the event, though the brand showed a lot of promise, it was killed, as it did not meet the corporate objective criterion. On the other hand, an OTC product marketer did not pre-test advertising before it was given long-term intensive exposure on TV. A post-test showed that the enormous amount that had been spend on the communication had all been a colossal waste as the basic premise of the communication had been ‘incorrect’. The marketer would have done well to have tested out the advertisement before committing enormous amounts of scarce resources to it. The Muder to research was justified. decisionChiba

11 WHEN NOT TO? An obvious elementary rule is – when the benefits of MR don’t justify the costs. The decision to research fully before is sometimes not justified when timeliness is of essence – a promotion or advertising that is to coincide with an event is conceived of at the last moment and the marketer’s judgment backs it. Where topicality is the issue. Imagine pre-testing every single Amul Butter hoarding and waiting for the report before approving for publication! Also when the cost of the decision going wrong is small- a localized promotion or tactic, a one –off ‘ship-inthe-night’ communication etc. a small brand tactic. Whatever the reason to research, the cost of the research in term of both the time and the actual cost must be weighed against the cost of the decision and the likelihood of research improving the decisionmaking quality. It makes more sense, for example, not to pretest an ad where there is no major threat (in the marketer’s judgment) and it costs 10 percent - 20 percent of the total budget allocated to pretest the ad. And sometimes, as in the paints case described before, it makes little sense to pretest if no decision-making help is going to come out of it. Or if, due to environmental reasons, the price of your brand is fixed, there is little sense in undertaking a pricing research. It would be ‘nice to know’, say the premium that your product / brand commands but it can in no way affect a material decision. Research is not justified. Muder Chiba

12 UNTIL NOW… To summarize, the realistic research buyer knows when the decision to research is justified, when the apparent costs are actually an investment in making better decisions, in making better use of scarce resources. She also knows what the MR report stands for, an aid to her judgment and in no way a replacement for it Muder Chiba

13 HOW TO BE A WISE MR BUYER We put up the argument that the Wise market research buyer uses it as a weapon in her marketing battles and not as a crutch. She does so by evaluating whether MR is of any decision-making use in the situation at hand and whether the costs of research are justified. Now, you have decided, keeping in view the objectives and constraints that you are subject to, that you need to undertake market research. What do you do now? You, the marketer, need to know what to research, which professional MR agencies to invite, whether to invite one or more agencies. What to brief the agency and how to judge the quality of the research to be provided. Muder Chiba

14 WHAT DO I NEED TO RESEARCH? The answer to this question is not as simple as it apparently seems. The case of the embattled account ’planner’ may serve to answer this a bit. Creative had come out with two alternatives for a press ad for a footwear brand. The brand, being a new one, being introduced by an established player, had a name that was quite conducive to a mnemonic character. The brand (let’s call it Leone for convenience) had say, a friendly lion called Leone as the mnemonic. In one ad Leone was big, covered more than half the layout and the four benefits of the brand (say price, durability…) flagged on the other. The other layout was the reverse. The brief to research was to test out which of the two was communicating the benefits better. The results showed that one of these was marginally better off. However, since the ad had not evolved through a process of research findings, both the approaches could be ineffective, though one emerged better than the other did. The need was to test out the basic premise of the communication. What was the peg on which the communication was to hang and which approach was doing better? Rather than a laundry list of potential benefits hanging out to dry! That should have been the brief. And this is precisely what the marketing-savvy MD of the company asked when research support was cited in favour of the ad. Or when you have a new product and brand developed for the market. The brand ‘formulation’ has been arrived at either based on basic research or derived from an overseas principal/collaborator. You want to know the right price for the brand. Brief the researcher for a pricing test and you will get a competent one, but one which boomerangs when you reach the market. The reason is that you needed a ‘total offer test’ as the interaction of the brand and the product features would lead to a price realization that is difficult to isolate in such a scenario. Which leads us back to the question – what do I brief the researcher? The beginning of an answer can emerge if we rephrase the question a bit. Muder Chiba

15 WHAT CAN I TELL MY RESEARCH AGENCY? This here is the crux of your marketing research activity. The decision on how many agencies. Which ones, how to judge will all stem from the attitude to the research agency. Ideally, the simplest approach to the agency is to treat it as the expert and relate to it the symptoms of your brand without necessary going into the history of the company. A very close parallel would be the way you brief the doctor when you go to him with an illness or even for a routine preventive check-up. You provide the symptoms ailing you, he asks a few very penetrating questions on the symptoms and their severity. If unaware, he would ask for germane bits of your past medical history (Diabetes…). The doctor would then recommend a course of treatment, which best fits, the exact combination of the ‘problem’ that he has on hand. There is no fixed, pat solution as each case is unique, different from another in ways, which are perhaps unseen. Hence, to let the market researcher judge the ‘right’ cocktail of treatment for your case, you need to tell him the real symptoms. Imagine the doctor treating your foot when you have a pain in your hand because that is what you have indicated to him. Sounds too ridiculous to the true? But that is precisely what happens many times. In the case mentioned above, the treatment could have to do with the ‘product offer’ of the way it was being communicated and not with the pricing in isolation. The foot was being treated when the pain was likely to be centered in the hand. However, as a matter of professional habit, one need not share internal issues, which though they may impinge on the research a bit, make little difference to the outcome of the study. Let’s look at the case of the radical creative. The TSL Ad agency Branch head called up the research agency and wanted an urgent pre-test of advertising for an IMFL brand they were working with. The brief was that they had developed based on a peg derived from earlier research, two creative options, and two finished layouts. One took a more safe ‘liquor ad’ looking approach whereas the other, a more bold, totally fresh approach. Though both were fine by them, research needed to tell them which one to go with-which one to present to their client. Research showed that the fresh approach was indisputably ahead. What was not briefed to the researcher was that Creative had initially developed only the ‘Fresh Approach’ ad and was insistent on it. And the sedate approach was a compromise. Muder Chiba

16 HOW DO I CHOOSE MY AGENCY? Client TSL developed a strong one-agency relationship with a small agency headed up by a senior hand which provides all its requirements and plays an in-house agency role when required. Client QSL on the other hand went into the market research arena with a view to arriving at the ‘best price supplier’. It asked for quotes for 100-retailer study in Delhi from no fewer than eight agencies across the board and decided upon its agency for a launch of a whole slew of products based on this. It took decisions based on costs without reference to value. It took an unreasonable risk in using data derived from this approach to pour in huge investments. ZSL’s selection strategy was relatively less simple. It decided to go with agencies based on their proven area of expertise. Each of them is correct on the face of it. ZSL is correct because of the sheer scope of its product range and the huge market research budget that it uses. TSL is correct because its unique set of needs is best served by such an approach as it does not have the budgets of a ZSL or a special manager to administer them. It also gets the best instead of the second-best. QSL is also correct because it possibly has a very limited budget at its disposal. But the risk it runs in selecting a market research agency through a tendering process is enormous. It runs the risk of falling to the GIGO (Garbage in Garbage Out) principle. Which brings us to the paramount question of how you judge a proposal from a market research agency and Muder Chiba decide how to go ahead.

17 HOW DO I JUDGE A PROPOSAL? The central issue, which is to be judged, is whether the proposal addresses your concerns well enough. Does it look at your stated symptoms dispassionately and derive the real concern areas, does it then clearly lay out what information analyzed in which manner would answer your queries. Then does it propose to gather the information in a way that is correct, does it follow the basic niceties of sampling procedure? And is the cost then commensurate with the value offered in its totality. The totality being the researcher’s inputs, the sample sizes, the relevant techniques the sampling pattern and the analysis proposed. Muder Chiba

18 TO SUM UP The realistic research buyer would judge the need to research, and brief the selected agency with the symptoms correctly. She would then evaluate the proposals in view of the totality of the proposal. Muder Chiba

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