Market Research in a VUCA world

A VUCA world – Volatile, uncertain, complex and ambiguous.  While you may not have heard the term VUCA itself, I think most of us resonate with those descriptors of today’s world.

The term VUCA was originated in the military in the 1990’s and is now being used in management circles.  One of the first steps an organization can take in ensuring that it responds appropriately to VUCA situations is to understand what is going on.  That is exactly what Market Research is so great at!  But how well does Market Research take into account the VUCA dynamics?  Let’s look at the various components of a VUCA world and think about how Market Research can help.


A lot of times in Market Research we work with averages.  We describe the majority of responses and use terms like most and many.  That is valuable work and we shouldn’t stop doing it.  However, volatility comes from the non-majority.  Volatility comes from the outliers that may have been there to read but we might be ignoring them if we only focus on the norm.  A scan of the social media universe would be helpful in uncovering some potential volatility. After all, we know what one well placed tweet can do to upend a long term strategy.

One of the studies I did for a client illustrates the kind of work that might help in a VUCA world.  In the year 2000, there were starting to be rumblings about vaccines causing autism (today’s equivalent might some tweets).  A large scale segmentation study was able to identify how many people held these anti-vaccine attitudes and how those attitudes fit into their life view.  This group was a potential VUCA type event waiting to happen and we can hypothesize that that group has grown in size today.  (This study was published by the client, Merck, and can be found in the journal Vaccine in March 2005.)  Conducting these types of studies to understand the entire landscape and then following negative groups can be the key to understanding the potential sources of volatility.

Another area to consider is how we forecast trends.  We spend a lot of time uncovering potential events (competitive new product launches, potential legislation, etc.)  We take trend curves from various other historical launches into account and then adjust them for those events we anticipate.  That’s useful, and well and good.  But those are for things are continuations of what is going on today.    What are the things we can’t know about?  Perhaps this is only a topic for war gaming but is there anything market research can do to uncover what some potential sources of volatility might be?

Uncertain-This would be an interesting area to explore how well Market Research can pick up the uncertainties.

Complex- We all want things to be simple, we want to understand.  But we need to walk a fine line between creating a comprehensible story line so people can make sense of what is going on and simplifying too much, so that they lose the texture of the events.

Ambiguous- Market Research can certainly help reduce ambiguity.  We can describe the world as it is and try to figure out what might be.

So perhaps a plan for Market Research in a VUCA world should include an annual scan of the social media world, followed by a large scale custom study to assess the resonance of the negative items, if any were found.

I’m just beginning to think about the types of studies that we would need to help management better understand the VUCA world of today.  I’d love to hear some more ideas from readers.

Market Research with Impact

One of the recent Research Daily Reports that Bob Lederer has posted on YouTube has stuck with me.  This showcased David Santee’s (former client side MR) views on becoming a trusted advisor.  I do recommend watching it.

His views dovetail very closely with what I have been saying about interaction.  To recap, McKinsey has identified that the types of jobs in which interaction are crucial are the growth jobs of the future. But when we in Market Research focus on getting our projects done and not on making sure they get incorporated into the companies DNA (David Santee’s words, not mine), then we aren’t doing the interaction part of our job very well.  When we think our reports will speak for themselves and don’t work on how to ensure they get acted upon,  we aren’t doing the interaction part of our job very well.  When we avoid meetings as a waste of time, and then complain that the brand team are idiots because they ignored what we wrote in our report, we aren’t dong the interaction part of our job very well.

I’ll repeat what I said in my back to basics entry.  The purpose of marketing research is to help a company increase sales.  If you aren’t working towards that, if you think your job is to create reports, then you aren’t doing your job.  No wonder senior leadership of MR departments is sometimes drawn from outside MR, such as the example that David Santee cites.  I saw that first hand several years in a department I was in. Back then, I didn’t get the reason, but I do now.  It’s a failure of Market Research to look beyond their work to what the impact of their work is.

David Santee has some good recommendations for change at the senior level which  you can see on the video, and I’ll add ones here for how to get this thinking further down into the organization.

  • Adding into people’s objectives things that measure the impact their research has had.  Perhaps, how often their research solved the problem for the brand or pointed to a new direction,
  • In status meetings, don’t just talk about active project status, talk about what efforts people are making to ensure that their previous research is being implemented.
  • In department meetings, highlight people or projects that changed the brand or company’s direction.
  • Make it mandatory that MR staff take a course or read a book on the topic of persuasion and identify one thing that they can do to ensure their ideas get listened to
  • Mandate that employees attend meetings at which they might have a chance to affect the decisions being made, regardless of whether it is based on their research.
  • And (echoing what Mike Garcia has added in his comments) get your vendors involved in making sure the project has impact!

I am sure there are other ideas that you can come up with and I’d love to hear them, and what happens when you start implementing them.

Back to Basic II: How does marketing research help marketing?

The role of marketing research is to increase the effectiveness and decrease the risk of marketing efforts.  Marketing decisions can be made without any input from customers, but decisions made by understanding customers often yield better results than if you don’t do research.

For example, 80% of all new product entries fail.  A good marketing research program can  help reduce the risk of that failure.  It won’t eliminate it, because marketing research has not yet reached the stage when it is infallible and because people ignore or misinterpret the results of research, but it can reduce the risk.  Failure of a new product costs a lot of money, which is why marketing research programs are worth the investment.

The best way to explain how this works is to look at the 4 P’s of Marketing and explain how Market Research can help with them in the context of launching a new product.

Price:  A product may fail because it is priced too high or too low.  Marketing research techniques have been developed to collect customer opinions on price.  One commonly used technique is called the Van Westendorf model.  However, the research is not infallible.  I have seen products priced in a way that fits with the research and still be perceived as too  highly priced.  But usually the results are better than if you didn’t do the research.

Place: This is a neglected area of market research but perhaps with mobile technology this area will get more interest.  It is important to know where your product is most likely to be purchased so that your product is distributed in the right way.  I have seen products fail because the marketing department didn’t take “place” into account in a clear enough way and there haven’t been good tools for researching that.

Product:  This, and promotion, are the areas that get the most attention in market research.  The belief is that if you get the product and the advertising right, that a new product will succeed.  Typical kinds of research done about the product in the consumer world are concept tests (where a written description is shown to respondents who rate how likely they are to buy the product) and product placement tests (where the consumers are given a product to try and rate.)  Some companies efficiently screen multiple concept tests at one time. Then the top scoring concepts are given more attention and polish.  Product testing is often skipped: It is one of the most expensive types of research plus some regulated products can’t be put into product testing, such as pharmaceuticals.

Promotion:  For many years the major (and most expensive) form of promotion has been advertising.   Market research can help you identify the key elements of developing an advertising campaign:

  • Target audience- this one is key.  When you do your concept testing for developing the product, you need to pay attention to who is most likely to buy the product.  That should go into your forecast (to determine if you have a big enough target market for the product to be successful) and also inform your advertising.  Advertising that doesn’t take into account who is likely to buy the product runs the risk of being annoying and unpersuasive
  • Perceptions of product and category- in order to create great advertising, the ad agency needs to know how the customers feel about the category as it is. Do they have a problem with products in the category that your product can solve?  If you don’t do research, you run the risk of making assumptions that are false, which can lead to failure.
  • What is the most effective message to say about your product? Once you know how consumers think about your product, you can develop several options for your basic message.  Testing the different options to find out which one is most compelling gives you a more informed basis on which to make this decision.  This may be overlooked, because people want to jump straight to advertising and/or they may think the strategic focus is obvious.  Getting the message right can have a huge impact on sales.
  • What is the most effective way to say your message?  Ads that say the same message can look and feel very different and have very different effectiveness at selling the product.  Thus, an ad agency will usually create multiple “creative concepts.” Testing the final options for the creative concepts is one of the most creative types of research there is.  There are many ways to do this from focus groups and one on one qualitative interviews to large scale ad tests to the new neuromarketing techniques. Problems crop up with this stage when you haven’t done the earlier stages.  I’ve also written about some of the problems of testing ad concepts in another post.   (Link here   )

Introversion and Market Research

I recently took the Myers-Briggs Inventory for the fourth or fifth time and as before scored (as expected) as an introvert – not as an extreme introvert- but still solidly in the introvert camp.  Taking the test reminded me of how my score on a test right after college led to my career in Market Research.   I was presented with a list of potential careers based on my test results, which included Market Research.    So, one reason why Market Research may be filled with introverts is because career counselors have identified it as appropriate for introverts.

I think Market Research is well suited to introverts, it can be a great career.  (It was for me.)  But it has changed since I entered it.  Prior to automation, there was lots of solitary work, pulling data, creating charts and graphs, and writing reports.  With automation and outsourcing, some of that has gone away.

There are other work environment changes in recent years that affect the suitability of the work for introverts.  In her book, Quiet, Susan Cain talks about the relatively new emphasis on team work, which puts a strain on introverts.  The world in which cube farms are common and offices are rare also puts a strain on introverts.  Thank heaven; this is counterbalanced by an increased ability to be effective remotely so that more and more people are working at home.   Working at home would seem to be a dream situation for an introvert, but if the person doesn’t make an effect to get out to make sure your work gets recognized, it could be make one less successful.

Introversion is a hot topic.  I am getting lots of readers of this blog who want to know about introverts can act like extroverts.  Bob Lehrer, in his PharmaMR newsletter that came out this week, has chosen to focus on my views about introversion.  The first draft I reviewed sounded like I was very critical of introverts, which I am not.  Just to be totally clear, I consider myself militantly pro-introvert! I am however focused on the tension between introversion and what it takes to be successful in the Market Research function.  One of my goals in this blog and the work I do is to help introverts become more effective, without changing their fundamental nature.  While I loved the premise of Susan Cain’s book Quiet, that the pro-extrovert world should adapt to recognize and get the most out of the introverts in the world, I know that I can’t do anything about that.  What I hope to help with is to identify small changes that an introvert can make to adapt to the “world that won’t stop talking” (from Susan Cain’s subtitle).


For Newbies-Two types of Market Research

This blog has primarily been written for Market Research Professionals such as myself, but it appears to be showing up when people search for the different types of market research.  Since my previous post about two different types of market research isn’t appropriate for a newbie question, here it is the information which newbies to market research may be looking for.  Those of you who are experts, please feel free to comment and make any corrections, or skip it.

The term Market Research encompasses a lot of things.  If you are being asked for two different types of market research in a class, the answers your teacher might be looking for could be “primary” and “secondary.”  The question also might be asking for the two different types of “primary” research – qualitative and quantitative.  It can also be referring to the two main different types of qualitative research.  Explanations of each are below – you will have to figure out what is appropriate based on the way your particular teacher asked the question.

Primary market research is when you (the client, i.e., the person or organization who is going to use the information) decides what questions to ask, and then work out a way to ask them.  There are lots of ways to collect data for primary market research- it can be done online, in person, on the telephone or via mail.  Your decision should be based on how you can best reach your respondents (those who you want to ask questions of) and what you want to do.

Another crucial decision when conducting primary market research, is whether to conduct qualitative or quantitative research.  You can mix and match technique (qual/quant) with medium (online, telephone, in person) – there are innovative ways that have been developed to do almost anything.   The Qual/Quant decision should be based on the nature of your questions and the answers you need.   Here’s a way to tell them apart – if you want to use statistics and say “blank” percent of people said that KKKK OR more people liked RRRR than SSSS  OR people rated concept WWW higher than concept TTTT – then your question is quantitative in nature.  If you are content with saying “It seems that the key to why people liked concept WWW is the last line.” OR “People got very excited when shown BBBB because they really resonated with the idea of UUUU” OR “Concept development in this area needs to take in to account people’s needs for  FFFF, RRRR, and JJJJ”  then your method should be qualitative.  (One of my personal pet peeves is people who try to combine them both without really knowing the limitations of both. Take it with a grain of salt if someone shows you an average from a focus group.)

Within qualitative there are two basic types – individual interviews (also known as depth interviews) and group interviews (also known as focus groups, but also can be known as dyads, triads, or mini-groups.)  To decide between them, you need to think about whether the group interaction will be useful (such as in some special projective techniques) or whether the group interaction will cause influence that is not useful (for example, since ads are usually viewed when people are alone, showing people alternative new ads is usually done one on one.)

Secondary market research is when someone else has taken responsibility for the data collection and the client or end user doesn’t (usually) get any input.  This can refer to data such as sales data or prescription data, or to surveys done on a syndicated/subscription basis or published surveys used as promotional efforts.  IMS, Wolters Klouwer, IRI and Nielsen are some big names in the area that collects data on sales and prescriptions.  NPD collects consumer purchase data in categories like restaurants and clothing.   Another type of data like that is census data (available free online from the government) which is used for identifying where to put retail stores.  For health issues, there are government surveys such as NHANES that are also free.

Some companies make a business of conducting surveys and selling them to companies on a subscription basis. There are many but some big names include companies Gallup, Datamonitor and Decision Resources.  Also, a company may be trying to get attention and may do a study and provide some of results for free in order to get publicity.  Another category of data you can access is completed by stock analysts who sometimes issue reports that can be useful if you have access to them. Google is a great source, but a good information specialist at a specialized library or firm knows about sources that you will have trouble finding on Google.

Even if you are going to do primary research it is a good idea to check out secondary data – it usually makes you smarter so you ask better questions.  Sometimes it can be good enough and save you money.

More and better insights

Insights, insights, insights.  I’ve spent a lot of time debating whether something is an insight or not.  There’s a lot of talk about what insights are and how to get them. In my view, insights are a new way of looking at things that leads to game changing behavior, which leads to competitive advantage, leading to being worth the cost to fund a Corporate Market Research Department.  Without insights, Market Research ends up just funding projects without really accomplishing anything.

So how can you improve insights?   I think that we need to realize that, as a form of creativity, insights require different thinking skills.  In his new book, Imagine*, Jonas Lehrer describes two types of thinking:

  1.  Convergent thinking- all about analysis and attention- the type of thinking market researchers use most often.
  2. Divergent thinking- described as “unexpected thoughts when logic won’t work”- which is a good description of the kind of thinking that leads to the deepest insights.

Aha!  This means that the typical market research thinking doesn’t yield divergent thinking.  This starts to explain why market researchers may usually be so poor at coming up with insights.

But it doesn’t have to be that way.  Everyone is capable of divergent thinking, in the right conditions -different types of conditions other than the extreme focus and analysis that market researchers are used to.  To prompt divergent thinking and thus better insights, we need to encourage people to get out of their routine way of solving problems and approach things in a different way.

I recommend reading Lehrer’s book, to help you understand this topic in more detail.  Interestingly, the book starts with a market research story – how ethnographic work and breaking the rules on testing new products resulted in a new breakthrough product for P&G.  It’s worthwhile reading for Market Researchers just from that stand point.  (Note I wrote this post before this book was pulled off the shelves.  Lehrer has has admitted making up quotes – no word if the book will be reissued/rewritten, but looking at this several months later I think the point I am making in this entry blog is important enough to leave as is.)

Following are a few of they ways I took away for how to create conditions more appropriate for generating insights (using divergent thinking processes):

  • Do things to get into a positive mood
  • Relax and take a break
  • Capture early morning thoughts (set your alarm clock for a half hour earlier so you can lay in bed and think when you are half asleep)
  • Pay attention when you are daydreaming
  • Surround yourself with blue (Hmm, what if each MR department had a blue “insight” room)

There are some surprising suggestions later on for group creativity that I won’t summarize including why brainstorming doesn’t work.

The fact that insights require a different type of thought pattern probably explains why our analytically heavy market research community has been relatively poor at generating insights.  But it seems that there are things we can do to change that, it is not immutable.

Back to basics: What is the role of market research in a corporation?

As the basic text book in my first market research course said, the role of market research is to reduce the risk of decision making.  Corporations exist to make products or services which make money/profits.  In order to be competitive they need to be smart, make good decisions, and keep their costs down.  To keep up with changes in the environment, they need to take risks.  A strong Market Research department will help ensure better decision making by providing more information, thus reducing the risk of decision making.  It can help you with all the decisions that need to be made in marketing a product – what to market (“product”), who to market it to (“target audience”), what to say (“product positioning”), where to market it (“place” or distribution), what the price should be and how to market it (“marketing plan”).  Without the right market research, companies can make lots of mistakes.  (See my post on new Coke for an example.) So market research can and should be a competitive edge.  Great market research should lead to better sales – corporate market researchers aren’t sales people but because they make everyone smarter, the company should sell more.

That’s the argument for conducting market research on behalf of a company, but what does the market research department do if they aren’t actually doing the research?  A common “project based” way to think about them is as purchasing managers who specialize in marketing research.   But that understates the value of their role and – in essence- identifies them with “what” they do, not “how” they do it.  That places a lot of importance on doing things more cheaply and doesn’t open up the possibility for doing things better or for adding value to what they do.   That is the essence of my theme – that in order for market research to achieve its potential in helping the corporation achieve maximum potential, Market research needs go beyond purchasing market research and become experts in adding value.  To reiterate my theme – “You are not your project, you are the value you add, you are what you do with your project.”

Market Research as a sandwich

An analogy will help me explain what I mean.   I like to think of market research as a sandwich composed of bread and filling.   I developed this analogy when I moved from a corporate market research job to a supplier and then back again.  The role of the corporate market researcher is the bread and the content of the project is the filling.  Just like in market research, both the bread and the filling can vary – a lot!  The corporate market researcher can add lots of value (like a very flavorful onion bagel) or just be an order taker or carrier of messages from the marketing team (like squishy wonder bread).  The project type can be primary research or secondary, quantitative or qualitative or ethnographic, just like the sandwich filling can made of meat, fish or vegetables.  The bread is responsible for the interface with the person holding and eating the sandwich, which is the role of the corporate market researcher to the corporation.  And the bread is in between the corporation and the filling (i.e., the market research supplier.) But the analogy breaks down because if the bread (corporate market researcher) is doing his job well, he or she is determining the filling type and contents.  As we know, the bread in the sandwich doesn’t pick the filling.

When I thought of this analogy, I realized that I liked being the bread! I liked the interface with the brand team, knowing the brand issues, determining the type of research that was done and influencing the actions that were taken.  I didn’t like being the filling at all, not knowing how the research was used and having no influence on how it was used.  This was brought home to me when I worked on follow-ups on a major project I had sold to the Merck Vaccine division.   I was selling research at the supplier I worked at  and this was my first sale ever – I can talk about it because it turned in to a publication so you can read about the project in a medical journal.   This project created a segmentation of parental attitudes towards vaccinating their children.  I then developed a list of implications of how to apply the findings, with recommendations on which products in their product line would be most appropriate for which segments, how you would go about find them, what types of research you would do.  These were all the kinds of things I would done as an internal corporate market researcher in an earlier job.  But there was no response – I never heard another word from them about how they were applying it. (Of course, they could have done work with someone else, I have not way of knowing, this is not a criticism of them.)    It was very frustrating to me that I wasn’t involved and didn’t know.  That frustration led me back to working inside a corporation.  I wanted to be the one identifying and recommending applications of my work, and I wanted to see how it influenced the business.

Not all corporate market researchers are as into the influencing and application of market research as I was. Over my many years in market research I have seen several patterns – this is not about a particular company at all.  Some market research analysts act as a carrier of messages from the brand team (sort of like being squishy Wonder bread without much character), which can be a very unfulfilling job, with little control of your work.  When corporate market researchers end up as order takers, they feel jerked around and end up resentful.  It can lead to major job dissatisfaction, turn over, and people leaving the field of market research.  It also short-changes the company, the MR department isn’t doing the best for the company, and not maximizing its potential if this happens.

Falling into the trap of being an order taker

People may inadvertently fall into “order taking” trap a number of ways.

  1. Being too busy so that you don’t go to meetings.   It may seem that you are so busy that you don’t have time to go to all the meetings you are asked to.  You may have so much to do that you resent going to brand team meetings, which seem like a waste of time because so little of it is about your work.   Time management systems often recommend that you can increase your productivity if you reduce time in meetings.  But I would argue the opposite-  that if corporate market researchers want to add value they absolutely should go to every meeting the brand team invites them to and they should ask to attend any other one they can inveigle an invitation to.   Why?  Because that is where they learn information that they need in order to do their job well and where they can use the information they have learned to influence decision making.  The point of power for corporate market researchers happens in that meeting. It is where you can apply knowledge of the brand and brand strategy to the market research – and if corporate market researchers aren’t at the table, they won’t know the strategy well enough and they won’t be able to influence decisions.  Over the years I have heard complaints from people about how their work gets ignored – duh!  It’s because you aren’t there at the meetings to ensure it doesn’t get ignored. Or because you weren’t there to understand the issues fully enough so that the research you designed fully meets the needs.  You have lost your point of power.
  2. Environment or what you perceive as the environment- It could be the environment that pushes us into that role – either because that’s the way it’s always been done in that company or that brand team seems to demand it.  I have seen this happen over and over again.  Interestingly, even brand teams that seem to demand order takers may not be satisfied when that is what they get.  They may want someone to push back and challenge them, even if they don’t seem to encourage it.  That’s exactly what happened to someone I will call Tim (just an example, not a real person). Tim was working with a brand team who was very demanding.  He was careful to solicit as much information about what they wanted as he could and focused on giving them exactly what they said they wanted.  But even though the brand team could articulate what they wanted, what they really wanted was to be told was what to do.  They ended up being very dissatisfied with Tim’s performance.  Tim was being squishy Wonder bread and they (underneath it all) wanted a crusty baguette.
  3. Focus on budgets and projects- Another way you may fall into this trap is to focus on your budgets and your projects and not on the impact that your projects and your “value adds” have on the corporation.   You may do this because that is what you have always done or it may be what is demanded of you. You may not see other alternatives.  While it may seem like a smart thing to do, since resume writers recommend including how much budget you control, it is dangerous.  The danger is that when you focus on projects and budgets you run the risk of being perceived as purchasing managers, and on how you can reduce costs of doing the same things and not on the value provided.  Don’t get me wrong! Reducing costs is important, but it shouldn’t be the be all and end all of the role of the corporate market researcher.  Again, you need to focus on adding value.  This isn’t about a company particularly, it is about a mind set that I’ve seen across my career.

A word on reducing costs: Don’t over spend for a low value decision

Just like every other department in the corporation, market research costs are under pressure.  Staffs and budgets are being cut and people are being asked to do more with less.    Automation and outsourcing are providing two ways for market research departments to cut costs and staff.

But there is another way to look at costs- projects need to be sized appropriately for the value of the decision that they will affect.  Corporate Market Researchers may already think they do this intuitively, but recent research reported by Daniel Kahneman in his best selling book Thinking Fast and Slow shows that even statisticians rely on rules of thumb and don’t use the correct formulas to estimate sample size.  Even as they make better decisions, companies shouldn’t over spend- the amount spent on reducing the risk of a decision shouldn’t be more than the expected value of the benefit that they will receive.  Low risk decisions shouldn’t be evaluated in high cost ways.   The basic equation to think about is:

Cost of research < (value of a good decision) – (value of a bad decision)

If you want to be more sophisticated equation, you can use the expected probability of the various outcomes to create even more precision – a true Baysian analysis.

But even completing the first equation in the real world is tough – no one actually knows how much more a good decision is worth than a bad decision because nothing has been done yet so you don’t know the outcomes of either one, and you certainly won’t do both.  However, even if you can’t quantify the two points, it can give you an order of magnitude for reasonableness for the cost of research about a topic.  For example, a major ad campaign to launch a new product is worth spending a lot on, while the 4th or 5th ad in a series that has been running for a while isn’t.