Editor’s note: Michele Holleran is founder of Holleran Consulting, York, Pa.
Many companies today are misguided in the way they view market research. Instead of seeing research as a foundation for strategic planning, enabling them to see the big picture view of what’s happening in external markets, they see it in a microcosmic fashion. In other words, they look at research as "projects," basically unconnected to one another. Rarely are the pieces of research integrated; rarely are research projects planned in conjunction.
Market research directors at major firms have complained that their internal customers (other divisions and business units) don’t use the research results for maximum effectiveness. These customers’ myopic view leads to tactical decision-making at best, and seldom are they concerned with how their research connects to other departments’ research.
Surprisingly, the best research planning and integration is done at small and mid-sized companies with a marketing director or vice president (but no market research director or department). These organizations know how to get the most our of their research investment for several reasons: budgets are tight, the competition is fierce and their market position is uncertain.
Case study: Answering many questions
Take the case of an organization that makes products for the residential building trade. This manufacturer needed answers to many questions, and needed those answers simultaneously. To make the assignment more challenging, there were tactical questions ("What benefit should we emphasize in our trade advertising campaign?") as well as strategic questions ("Should we vertically or horizontally integrate our product line?" and "Who are the most promising segments of the market?").
The objectives of the assignment, which was to be carried out over a five-month period, were lengthy and entangled with one another. In essence, this manufacturer was consolidating all its research monies into this single integrated project. Methodologies included focus groups with contractors, one-on-one interviews with wholesalers, an analysis of competitor strengths and weaknesses from the market’s perspective, a statistically valid phone survey with 475 contractors, sales and market share analyses, product feasibility testing, and a brand recognition/perceptual mapping study. The budget was less than $100,000 and the manufacturer wanted a consultant who would not only conduct all forms of research, but interpret what it meant so the executive team would all be on the same page as they engaged in the strategic decision-making process.
Valuable findings uncovered
The manufacturing firm learned a lot through this market research. Here’s a sampling:
- An underestimated competitor in one region of the country was seriously eroding the company’s market share.
- A strategic partner selected to secure distribution with wholesalers had a shaky and inconsistent reputation with the target end user.
- The company’s star product, once an innovator in the category, was now perceived as a "me too" product with no salient differentiating benefits.
- An important and lucrative segment of the market was being underserved by all competitors.
- A new product developed by the company was focusing on a benefit the end user ranked low on a list of benefits.
- A key influencer (the architect in this case) had no favorite brand and was frustrated by the lack of specialized niche products he needs.
- Price was a purchase driver at the distributor level, but not at the end-user level.
How results were reported and used
The consultants conducting the research consolidated the findings into one report. The presentation was designed to share key pieces of learning that would have strategic import to the company. In addition, individual reports focusing on tactical questions were delivered separately, addressing the research pertaining to sales, marketing, product development and customer service. The umbrella report presented to the executive team gave them the foundation needed to discuss and challenge strategic initiatives. It put the group on a level playing field, providing a block of data that was rich and complex but, at the same time, easy to understand.
The consultants’ approach was straightforward - here’s what we’ve learned, how does this jibe with what you know, what further data need to be gathered to get us all comfortable about what’s really happening in the marketplace?
This approach to sharing information is dynamic in nature, not a bunch of meaningless statistics in a binder that gets filed away. The interactive nature of the presentation acknowledges that the consultants aren’t pretending to understand every nuance of the market, but that they bring value as a result of not knowing the nuances. The research results are pure, unbiased and without pretense.
Translating research into action
After several strategic planning sessions facilitated by the consultant, the executive team adopted eight strategic initiatives that were designed to more than double the company’s growth in a five-year period and seize the position of market leader in the category.
Says the vice president of marketing who commissioned the research and planning initiative: "The research had a profound impact on how we began to see the real world. We realize we were looking at things through rose-tinted glasses. It was a wake-up call for us. Our consultants brought back all kinds of data that we found hard to believe at first. We made them go back several times to document and corroborate specific findings that seemed questionable to us. The interaction was frustrating, intimidating and gratifying all at the same time. It was a true growth experience for our executive team. This is the way to do research - comprehensively and with a fresh set of eyes."