Myths of Marketing Research
Myth 6: Most Research Is a Waste”
Research can turn out to be wasteful for many reasons. This book is expressly designed to make sure managers avoid such a fate.
There can be many culprits behind wasted research. Sometimes research is wasted because the manager has personal motives for not effectively using the research after it is done. Inexperience, time pressure, or relying too much on the research supplier can also lead to miscommunication that will virtually ensure that the research cannot be useful.
Often the researcher is an equally guilty culprit. Some research specialists keep a distance from management simply to protect their own special status. Sometimes the researcher, whether by training or inclination, is not adequately concerned about making the re- search project managerially relevant. This is especially common among academics and freshly graduated Ph.D.s. The researcher may be so caught up in the world of research sophistication that he or she may not really understand, or may have strange ideas about, managerial relevance. It is not uncommon to hear researchers talk about the quality of the design itself or the statistical significance of the results as the true test of whether research was good, rather than how relevant it was to the manager who asked for it.
Finally, the problem may simply not be the fault of anybody or caused by a lack of trying. In many cases where both sides really
want to make the research managerially useful, the parties do not have a procedure that can make a piece of research managerially relevant and useful. Chapter Four specifically sets out a procedure that can go a long way toward ensuring a productive manager- researcher collaboration.
Moving Forward
Low-budget managers should not be put off from doing research for any of the following reasons:
• They think they already have enough data; almost always, they don’t. I suggest a procedure in Chapter Two for determin- ing what information they really need.
• They don’t face enough big decisions. Research is not only for big decisions, and sometimes big decisions do not need it.
In Chapter Three, I explain how to determine when to do research and when not to.
• They fear loss of control of their destinies because they are not sophisticated enough to be good research users. But most of the research discussed in this book requires only common sense. Even the discussion of analysis techniques and statistics in Chapter Ten is in simple terms.
• They think research is simply conducting surveys and surveys are expensive. But as I demonstrate in the later chapters, all research is not surveys, and even surveys can be done inexpensively.
• They fear it will be a waste of time and resources. Research can be a waste, but it need not be, especially if the approach outlined in Chapter Four is carefully followed.
Research is essential for management success. Probably nowhere is this more obvious than when an organization is planning a new venture. In such cases, too many managers enamored over an idea
that can’t miss neglect to do the simplest basic research. For exam- ple, Polygon, a New York software company, developed a new prod- uct, Easy Path, that would increase the efficiency of hard drives.
Despite the product’s relatively low cost and obvious usefulness, Polygon neglected to find out whether information technology pro- fessionals knew they had a need or problem that the software could address. It turned out they were unwilling to pay $99 for something that wasn’t apparently needed. For its next product launch, Poly- gon decided to spend $20,000 on marketing research.1
Even those who believe research may be valuable in launching a new venture may still not embrace it enthusiastically. Take the case of an entrepreneur who had developed a new coated-peanut snack food and hired a researcher to help with initial marketing de- cisions. But he was “very suspicious of the whole thing. It all seemed like a lot of talk.” Yet when the researcher got the entrepreneur di- rectly involved in the research process (an approach we advocate fervently), he became a believer. He was recruited to survey his pa- trons himself and found a large number of unexpected comments, including one likening the product to dog food. He subsequently reformulated the product and used research to decide on a distri- bution channel (supermarkets were not a good idea as this would require major advertising to build brand recognition), the most ef- fective packaging (stackable bags), and the price ($3.25 for an eight- ounce bag). Despite a considerable outlay, the entrepreneur felt that the research ultimately “changed my mind about how to sell the product.”2
This perception is now much more widely shared. Research on new ventures such as this is deemed so crucial that venture capital- ists typically no longer consider proposals that are not backed by solid market research.
This book is designed to make not only willing but eager users out of all those attempting new ventures, whether they are prod- ucts, services, social change campaigns, or new ways to raise funds.
It is also for managers in organizations with simpler decisions, such as whether to change an offering, revise a Web site, raise or lower a
price, or run with a new communications theme for an existing ven- ture. Research is essential in most of these cases. In a surprising num- ber of cases, it is not only essential but also affordable. The pages that follow will make that point crystal clear.
Organization of the Book
I assume that readers are at least willing to suspend major reservations about the prospect of doing more research and want to move ahead.
This book shows readers how to decide when to use marketing research even when the budget is small and the stakes are not very high; describes an approach that can ensure that research that is undertaken is as useful as possible; and describes and evaluates a representative range of techniques for carrying out relatively inex- pensive research that is still of high quality—or at least of a quality level commensurate with the decisions management faces.
The next two chapters address two sides of the issue of when to do research. First, we consider the opportunity for research. Many managers do not see the myriad chances for conducting relatively simple investigations that would significantly improve their decision- making capabilities. They just don’t “think research.” In part, this is because too many managers are unaware of the diversity of uses to which research can be put. Furthermore, they may be unaware of the diversity of approaches that research can take. Research can consist of something as simple and straightforward as planned, systematic ob- servation of facts and events around us. It can be a simple market ex- periment or a controlled case study. It can be analysis of secondary data that already exist or a survey study of a convenient sample. All are legitimate research approaches that can prove to be extremely valuable to open-minded managers if they are done right and fit the circumstances.
But managers must be prepared to gather information, not just hope to recognize chances for research when they appear. Chapter Two has as its major objective showing managers how to organize to ensure that data are there when they are needed. Research is
much better if it is planned. Anyone who is serious about research must be systematic about it. A serious manager should prepare an annual plan for research just as one prepares an annual plan for ad- vertising or research and development.
Merely recognizing opportunities to do research does not mean that managers should plunge forward heedlessly. There are many times when the opportunity to do research ought to be passed by.
Sometimes this is because the state of the research art is not up to the challenge of providing the needed information at a reasonable cost. This is especially the case with research designed to explore customers’ psyches—their attitudes, perceptions, motivations, and intentions.
And no one should do research when the economics of the de- cision situation argue against it. Chapter Three takes up the general question of when it is economically sensible to go ahead with re- search and, if so, how much to spend on it. This chapter introduces the concept of decision theory, showing how this formal approach leads to reasonable rules of thumb that will help a manager decide whether to do projects A, B, or C or all of them or none of them. It also shows how to determine the total budget.
If research is to meet its promise, the end product must meet the specific needs that management sets out to fulfill. In Chapter Four, therefore, we will assume that both the manager and the researcher want to make the research as relevant and useful as possible but do not know how. The chapter offers a relatively simple approach called backward research designthat makes it much more likely that the re- search will be as useful as it can be. But both the manager and the researcher must be willing to devote considerable time to thinking through the research problem in advance, and both must have real- istic expectations about what research can do. Research cannot ef- fectively tackle many topics, and it can be only partially helpful in a great many others. If this book is to create satisfied users of research, it must ensure that they are not oversold users, especially when the overselling is something they unwittingly do to themselves.
Chapters Five through Eight get down to the nitty-gritty of the book by spelling out alternative ways of doing low-cost, good re- search. Each of these chapters introduces a set of techniques and discusses ways in which they should and should not be carried out.
Chapter Nine then considers the problems of collecting valid data, especially when using a questionnaire. Chapter Ten follows with an introduction to statistics designed to make a little less formidable a potentially intimidating topic by showing how statistics can serve rather than confuse neophyte researchers. Chapter Eleven con- cludes the discussion by outlining ways in which managers with a limited budget can acquire outside help and other resources to keep the overall costs of a research program as low as possible.
Concluding Comments
It is important to emphasize two key cautions at this point. First, the low-cost research approaches I am advocating here must be carried out with the highest standards possible (commensurate with the de- cisions and with the dollars involved). Second, slovenly, low-cost research is the most expensive kind since it can lead to worse deci- sions than those made without the research. The tragedy of much inexpensive research carried out by the untrained and the unsus- pecting is that it is really cheap and dirty research and worse still—
dirty often in ways that are hidden from management. It is always possible that bad research by chance will yield correct insights—
sometimes because only a dunce would miss the obvious. But in the long run, the only way a manager can be sure that the research has a pretty good chance of being right (and, if the procedure outlined in Chapter Four is followed, on target) is if it is done with as high a level of research standards as the technique and the circumstances permit.
Only if managers are satisfied with the research—only if they feel that they got as close to the truth as possible under the circum- stances—are they likely to be repeat users of research themselves and
be vocal advocates of the idea of research to business colleagues, coworkers, and employees. Only then will this book achieve its goal of being itself an effective marketing tool.
I believe strongly that a product or an idea (such as the concept of low-cost marketing research) will be accepted only if it meets customers’ needs and wants. In this first chapter, I have sought to ex- pose many of the irrational barriers and mystifications that have kept managers with limited budgets from seeing how research can meet their real needs. The following pages provide the tools to achieve this end. But I have only opened the door. It will be up to the reader to make the first daring steps in what can be an extremely rewarding effort.