How would you define campbell's target market for soup

Market Research 4.1 Explain the role of a marketing

information system and a marketing decision support system in marketing decision making pp. 94–99

KNOWLEDGE IS POWER p. 94

4.2 Understand the concept of customer insights and the role it plays in making good marketing decisions p. 100

CUSTOMER INSIGHTS AND MARKETING p. 100

4.3 List and explain the steps and key elements of the market research process pp. 100–118

STEPS IN THE MARKET RESEARCH PROCESS p. 100

Check out the Chapter 4 Study Map ������� �� �

What I do when I’m not working: When I’m not spending time with my husband and two kids, I’m practicing yoga, reading a book, or trying out a new recipe.

First job out of school: Financial Analyst at The Vanguard Group

A job-related mistake I wish I hadn’t made: Taking too long to launch a new product. Perfection does not exist, but it’s easier to get closer to what the consumer wants by seeing them interact with it in real time and tweaking as we go.

Business book I’m reading now: Thinking, Fast and Slow by Daniel Kahneman

My motto to live by: Worry only about what you can control

What drives me: Besides being a positive role model for my kids, I have a constant need to understand people to the point of knowing how to make their lives better.

My management style: Highly collaborative and action-oriented

Don’t do this when interviewing with me: Tell vague stories about your past when I’m looking for clear examples of your actions

My pet peeve: People not being accountable for their actions

PART TWO: Determine the Value Propositions Different Customers Want

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Meet Cindy Bean A Decision Maker at Campbell Soup Company

Cindy Bean is manager of Consumer Insights at Campbell Soup Company. Since joining Campbell in 2010, Cindy has spent most of her time leading Consumer Insights on one of two New Ventures teams responsible for shaping and driving an enterprise-wide, innovation pipeline against identified areas of consumer need. Cindy’s team is made up of cross-functional leaders who iteratively identify areas of exploration, and rapidly prototype and validate ideas that result in solutions or new product opportunities. Cindy has been a part of launching the successful Dinner Sauce line of products that includes Skillet Sauces, Slow Cooker Sauces, Oven Sauces, and most recently Grill Sauces.

Prior to Campbell, Cindy worked in a variety of industries, managing a variety of businesses. Cindy worked as a Qualitative Research Consultant, achieving her moderating certification. She synthesized and interpreted sales and market share data, competitive intelligence, syndicated research, current industry conditions, and other relevant information to deliver the monthly state of the vision care business to Johnson & Johnson’s Vistakon executives (J&J’s Vision Care Division). She improved marketing effectiveness for Wyeth Pharmaceutical’s (now Pfizer) Women’s Health Care products by planning, designing, and managing a portfolio-wide consumer segmentation study and led the insights for the anti-depressant drug, Pristiq. She led research activities for McNeil Consumer Healthcare’s Tylenol pediatrics, upper respiratory, and the Sleep franchise (Tylenol PM and Simply Sleep). And, she managed research functions within The Vanguard Group’s Institutional business, including company 401(k) and 403(b) plans.

Cindy holds a bachelor’s degree from Drexel University and an MBA from Pennsylvania State University.

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Real People, Real Choices

Here’s my problem…

A few years ago, Campbell set out on a mission to grow an otherwise stagnant soup business. Canned soup still

is popular among Baby Boomers. However, younger consumers just aren’t as interested. They turn to alternatives like microwaveable and mini meals (such as pizza and tacos). Campbell realized its core business is at risk if the com- pany can’t come up with products to entice the emerging group of millennial consumers who are between the ages of 18 and 34. These customers are 25 percent of the U.S. population, or approximately 80 million people. They spend a lot of money on food, but very little of it on soup.

To understand what makes millennials tick, Campbell went through a deep immersion. We scrutinized millennials’ culture and habits to learn what kind of soups appeal to them. I lead a cross-functional innovation team that conducted dozens of extensive face-to-face in-depth interactions with young consumers, both one-on-one and in groups. We ate meals with young people in their homes, checked out their pantries, and tagged along with them on shopping trips to the supermarket.

After that immersion, the team listed all the pain points millennials associated with canned soup. For example, they told us they think these products are too “processed” and they taste bland, homogeneous, and unex- citing. Another common complaint was the lack of healthy ingredients these consumers look for, such as quinoa and on-trend veggies like kale. We found this group includes “flexitarians,” that is, they eat vegetarian for a few days and then eat meat on the weekends, special occasions, to satisfy a craving, etc. They tend to care about sustainability, local sourcing, and company practices.

As a result of these insights, we then created concepts and prototypes to test our potential solutions for the pain points we identified. We continued to put these ideas in front of a series of focus groups as we fine-tuned our solu- tions based on the feedback we got from actual millennials.

This process gave us some great insights about what we could do to boost our appeal to millennials. One no-brainer was to change the packaging from a can to a pouch; our respondents told us that a pouch communicates a “fresher ingredients” message. And, we knew the flavor profile of the soup had to be bolder than the varieties that Baby Boomers are used to. We ultimately aligned on the following as our guardrails to create this new product platform:

$� Young adults looking for satisfying, easy meals for one $� Satisfies demanding tastes for a more flavorful life $� Always delivers of-the-moment flavors and packaging from a trusted

brand

However, given Campbell’s current portfolio of soups, we needed to posi- tion this millennial-focused platform differently from existing products we al- ready sold under the Campbell’s name. Specifically, most of the ideas we tested overlapped with Campbell’s Slow Kettle brand. The Slow Kettle brand was cre- ated to bring Campbell’s into the packaged premium soup category. Because consumers were becoming more interested in the rich, complex flavors they enjoy from restaurant soups, we saw an opportunity to bring that experience home. Our culinary team created Slow Kettle to bring a “prepared with care” feeling even though it still comes from the supermarket soup aisle. The flavors are familiar, they are hearty and filling, the quality is better than other canned soups, and the package is meant to convey homemade (it comes in a tub, like

Tupperware). The brand skews toward higher-income millennials. Because the price point is at a premium for the category, $3.25, it represents a small but interesting opportunity for Campbell.

Clearly we would need to do more work to figure out the best way to create a new offering that would grab millennials’ attention, make it clear that this is “not your father’s soup,” but at the same time avoid confusion with the Slow Kettle brand.

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See what option Cindy chose in MyMarketingLab™

You Choose Which Option would you choose, and why?

Option 1 Option 2 Option 3

Campbell’s Slow Kettle and Go brands.

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Cindy considered her Options 1 � 2 � 3

Option

Carve out a new space within the soup portfolio for this millennial-driven soup offering. We would have to demonstrate that the new offering serves a unique need for prepared soup that is not already available in Campbell’s other brands. This strategy would give us an opportunity to build a new brand from scratch entirely based on millennials’ needs. The brand could include soups but also possibly other food products such as mini-meals and

hearty on-the-go snacks, positioned to meet the needs of the millennial. This new product line would be so distinct that we wouldn’t have to worry about cannibalizing sales from other parts of our portfolio, especially Slow Kettle. However, it’s expensive and risky to build a brand. We would have to commit to at least a three- year investment to build awareness and encourage trial. Because we do offer somewhat similar products like Slow Kettle, if we fail to create a really tight message to set apart the new brand we might shoot ourselves in the foot by injecting some confusion into the marketplace.

Option

Reposition an existing brand to be the face of the millennial portfolio. Our Slow Kettle Brand already has many elements that could meet the needs of these young consumers. With a few tweaks, we could probably transform it into the kind of product that would resonate with this target market. This approach would involve less investment than building an entirely new brand, and we already have the internal manufacturing capability to

turn out these soups. On the other hand, we could commit the cardinal sin when marketing to millennials: offer a product they perceive as inauthentic. Because the Slow Kettle brand has already been on the mar- ket, these savvy young consumers might decide that a few tweaks to an existing offering doesn’t really speak to them. Millennials run from products they view as “fake” faster than soup boils on a hot stove.

Option

Don’t take the risk, and stick with our existing solutions. Investing in a unique millennial product might be just too costly and time-consuming, and it’s possible that a new solution wouldn’t deliver enough return on investment to justify our efforts. This conservative solution would allow us to focus our resources on maintaining our solid (though stagnant) base business. We could ramp up our advertising to appeal to the nostalgia of the familiar

Campbell brand, because millennials sometimes do respond well to this kind of appeal. On the other hand, if this stay-the-course strategy backfires we risk becoming irrelevant to an entire generation of new con- sumers. In that event we would continue to experience a decline in our bottom line as an aging group of loyal consumers eventually died off. And, if competitors eventually enter the millennial space we might be forced to sit on the sidelines as they capture this valuable target. We know that most consumer packaged goods (CPG) companies are taking similar steps to satisfy this new generation. Many traditional brands are transitioning to natural colors, removing artificial sweeteners and high fructose corn syrup, and in some cases moving toward a non-GMO label to address consumers’ concerns about genetically modified food. There’s no doubt that changes are coming.

Now, put yourself in Cindy’s shoes. Which option would you choose, and why?

Chapter 4

Knowledge Is Power By now we know that successful market planning means that managers make informed decisions to guide the organization. But how do mar- keters actually make these choices? Specifically, how do they find out what they need to know to develop marketing objectives, select a target market, position (or reposition) their product, and develop product, price, promotion, and place strategies?

The answer is (drumroll . . . ): information. Information is the fuel that runs the marketing engine. There’s a famous acronym in the marketing information systems field: GIGO, which stands for Garbage In, Garbage Out. To make good decisions, marketers must have infor- mation that is not “garbage”—rather, it must be accurate, up to date,

and relevant. To understand these needs, marketers first must engage in various forms of research and data collection to identify them.

4.1 OBJECTIVE Explain the role of a marketing informa- tion system and a marketing decision support system in marketing decision making.

(pp. 94–99)

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In this chapter, we will discuss some of the tools that marketers use to get that in- formation. Then in Chapter 5, we’ll drill down further on applying market research for decision making via marketing analytics. In the chapters that follow, we will look closely at how and why both consumers and organizations buy, and then how marketers sharpen their focus via target marketing.

Before we jump into the topic of market research, here’s a question for you. A marketer who conducts research to learn more about his customers shouldn’t encounter any ethical challenges, right? Well, maybe in a perfect world. In reality though, several aspects of mar- ket research are fraught with the potential for ethics breaches. Market research ethics refers to taking an ethical and aboveboard approach to conducting market research that does no harm to the participant in the process of conducting the research.

When the organization collects data, important issues of privacy and confidential- ity come into play. Marketers must be clear when they work with research respondents about how they will use the data and give respondents full disclosure on their options for confidentiality and anonymity. For example, it is unethical to collect data under the guise of market research when your real intent is to develop a database of potential cus- tomers for direct marketing. A database is an organized collection (often electronic) of data that can be searched and queried to provide information about contacts, products, customers, inventory, and more. Firms that abuse the trust of respondents run a serious risk of damaging their reputation when word gets out that they are engaged in unethical research practices. This makes it difficult to attract participants in future research proj- ects—and it “poisons the well” for other companies when consumers believe that they can’t trust them.

The Marketing Information System Many firms use a marketing information system (MIS) to collect information. The MIS is a process that first determines what information marketing managers need. Then it gath- ers, sorts, analyzes, stores, and distributes relevant and timely marketing information to users. As shown in Figure 4.1, the MIS system includes three important components:

1. Four types of data (internal company data, market intelligence, market research, and acquired databases)

2. Computer hardware and software to analyze the data and to create reports

3. Output for marketing decision makers

Various sources “feed” the MIS with data, and then the system’s software “digests” it. MIS analysts use the output to generate a series of regular reports for various decision makers.

Let’s take a closer look at each of the four different data sources for the MIS.

Internal Company Data

The internal company data system uses information from within the organization to produce reports on the results of sales and marketing activities. Internal company data include a firm’s sales records—information such as which customers buy which products in what quantities and at what intervals, which items are in stock and which are back-ordered because they are out of stock, when items were shipped to the customer, and which items have been returned because they are defective.

market research ethics Taking an ethical and aboveboard approach to conducting market research that does no harm to the participant in the process of conducting the research.

database An organized collection (often electronic) of data that can be searched and queried to provide information about contacts, products, customers, inventory, and more.

marketing information system (MIS) A process that first determines what information marketing managers need and then gathers, sorts, analyzes, stores, and distributes relevant and timely marketing information to system users.

Information for Marketing Decisions

Marketing Intelligence

Marketing Research

Acquired Databases

Computer Hardware and Software

Internal Company

Data

Figure 4.1 Process | The Marketing Information System A firm’s marketing information system (MIS) stores and analyzes data from a variety of sources and turns the data into information for useful marketing decision making.

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Often, an MIS allows salespeople and sales managers in the field to access internal re- cords through a company intranet. This is an internal corporate communications network that uses Internet technology to link company departments, employees, and databases. Intranets are secured so that only authorized employees have access. When salespeople and sales managers in the field can use an intranet to access their company’s MIS, they can better serve their customers because they have immediate access to information on pricing, inven- tory levels, production schedules, shipping dates, and the customer’s sales history. Related to the company intranet concept is the concept of customer relationship management (CRM), which we’ll develop more fully in Chapter 5.

Marketing managers at company headquarters also can see daily or weekly sales data by brand or product line from the internal company data system. They can view monthly sales reports to measure progress toward sales goals and market share objectives. For ex- ample, buyers and managers at Walmart’s headquarters in Arkansas use up-to-the-minute sales information they obtain from store cash registers around the country so they can quickly detect problems with products, promotions, price competitiveness, and even the firm’s distribution system.

Market Intelligence

As we saw in Chapter 2, to make good decisions, marketers need to have information about the marketing environment. Thus, a second important element of the MIS is the market intelligence system, a method by which marketers get information about what’s going on in the world that is relevant to their business. Although the name intelligence may suggest cloak-and-dagger spy activities, in reality nearly all the information that compa- nies need about their environment—including the competitive environment—is available by monitoring everyday sources: company websites, industry trade publications, or direct field observations of the competitive marketplace.

And because salespeople are the ones “in the trenches” every day, talking with cus- tomers, distributors, and prospective customers, they are a key to sourcing this valuable information. Retailers often hire “mystery shoppers” to visit their stores and those of their competitors posing as customers to see how people are treated. (Imagine being paid to shop!) Other information may come from speaking with organizational buyers about competing products, attending trade shows, or simply purchasing, using, and even reverse engineering competitors’ products, which means physically deconstructing the product to determine how it’s put together.

Marketing managers may use market intelligence data to predict fluctuations in sales as a result of a variety of external environmental factors you read about in Chapter 2, including economic conditions, political issues, and events that heighten consumer awareness, or to forecast the future so that they will be on top of developing trends. Television networks have observed how consumers increasingly “binge-watch” shows through platforms such as Netflix, and as a result have begun to offer their shows in ways that appeal to the changing preferences and expectations of consumers when they watch. For instance, TBS premiered all of the episodes for its comedic series Angie Tribeca in a single 25-hour event that they labeled a “binge-a-thon.” The strategy worked to attract tons of young viewers; one-third of the audience was totally new to TBS!1

Market Research

Market research refers to the process of collecting, analyzing, and interpreting data about customers, competitors, and the business environment to improve marketing effectiveness. (Note that the term marketing research is often used interchangeably with market research, but to be precise marketing research is broader in scope and often refers to the type of research

intranet An internal corporate communication network that uses Internet technology to link company departments, employees, and databases.

market intelligence system A method by which marketers get information about what’s going on in the world that is relevant to their business.

reverse engineering The process of physically deconstructing a competitor’s product to determine how it’s put together.

market research The process of collecting, analyzing, and interpreting data about customers, competitors, and the business environment in order to improve marketing effectiveness.

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that academics in marketing conduct about the field, whereas market research refers to the type of research that marketing professionals conduct about markets and consum- ers.) Although companies collect market intelligence data continuously to keep managers abreast of happenings in the marketplace, market research also is called for when manag- ers need unique information to help them make specific decisions. Whether their business is selling cool fashion accessories to teens or industrial coolant to factories, firms succeed when they know what customers want, when they want it, where they want it—and what competing firms are doing about it. In other words, the better a firm is at obtaining valid market information, the more successful it will be. Therefore, virtually all companies rely on some form of market research, though the amount and type of research they conduct varies dramatically. In general, market research data available in an MIS come in two fla- vors: syndicated research reports and custom research reports.

Syndicated research is general information specialized firms collect on a regular basis and then sell to other firms. INC/The QScores Company, for instance, reports on consum- ers’ perceptions of more than 1,800 celebrity performers for companies that want to fea- ture a well-known person in their advertising. The company also rates consumer appeal of cartoon characters, sports stars, and even deceased celebrities.2 Comedian Bill Cosby holds the record for the highest QScore ever recorded. Unfortunately, in light of recent criminal allegations and the related onslaught of negative media attention, the previously beloved comedian’s QScore dropped into oblivion, possibly the greatest QScore change in history.3 Other examples of syndicated research reports include Nielsen’s TV ratings and Nielsen Audio’s (formerly Arbitron’s) radio ratings. Experian Simmons Market Research Bureau and GfK Mediamark Research & Intelligence are two syndicated research firms that combine information about consumers’ buying behavior and their media usage with geographic and demographic characteristics.

As valuable as it may be, syndicated research doesn’t provide all the answers to marketing questions because the information it collects typically is broad but shallow. For example, it gives good insights about general trends, such as who is watching what TV shows or what brand of perfume is hot this year. In contrast, a firm conducts custom research to provide answers to specific questions. This kind of research is especially help- ful for firms when they need to know more about why certain trends have surfaced.

Some firms maintain an in-house research department that conducts studies on its behalf. Many firms, however, hire outside research companies that specialize in de- signing and conducting projects based on the needs of the client. Hint: This is a great career path if you love solving puzzles and getting into the weeds about what makes consumers tick! These custom research reports are another kind of information an MIS includes. Marketers may use market research to identify opportunities for new products, to promote existing ones, or to provide data about the quality of their products, who uses them, and how.

Acquired Databases

A large amount of information that can be useful in marketing decision making is available in the form of external databases. Firms may acquire these databases from any number of sources. For example, some companies are willing to sell their cus- tomer database to noncompeting firms. Government databases, including the massive amounts of economic and demographic information the U.S. Census Bureau, Bureau of Labor Statistics, and other agencies collect, are available at little or no cost. State and local governments may make information such as automobile license data available for a fee.

In recent years, the use of databases for marketing purposes has come under in- creased government scrutiny because some consumer advocates are quite concerned

syndicated research Research by firms that collect data on a regular basis and sell the reports to multiple firms.

custom research Research conducted for a single firm to provide specific information its managers need.

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about the potential invasion of privacy these may cause. Using the data to analyze overall consumer trends is one thing—using it for outbound direct mailings and unsolicited phone calls and e-mails has evoked a backlash resulting in a tidal wave of “do-not-call” lists and anti-spam laws. Maybe you have noticed that when you sign up for most anything online that requires your contact information, you receive an invitation to “opt out” of receiving promotional mailings from the company or from others who may acquire your contact information from the organi- zation later. By law, if you decide to opt out, companies cannot use your information for marketing purposes.

We’ll further develop the overall issue of database usage by mar- keters in the context of the popular phrase “Big Data” in Chapter 5. For now, just know that it’s a good bet that every website or mobile link you search—and maybe even every tweet or Facebook message you post to- day—will wind up in a marketer’s database.

Marketing Decision Support System

As we have seen, a firm’s MIS generates regular reports for decision makers on what is going on in the internal and external environment. But sometimes these reports alone are inadequate. Different managers may want different information, and in some cases the problem they must address is too vague or unusual for the MIS process to easily answer. As a result, many firms beef up their MIS with a marketing decision support system (MDSS). Figure 4.2 shows the elements of an MDSS. An MDSS includes analysis and inter- active software that allows marketing managers, even those who are not computer experts, to access MIS data and conduct their own analyses, often within the context of the company intranet.

A few years ago MasterCard developed an application of an MDSS it called the “Conversation Suite.” This product offered marketers

Information Needed for

Decision Making

Marketing Manager/ Decision Maker

Interactive Software

Statistical and Modeling Software

MIS Data

Figure 4.2 Process | The MDSS Although an MIS provides many reports managers need for decision making, it doesn’t answer !??��/�+=�+#%=]!�+%#�#��'"*� /��]!=‚��+#:�'��+"+%#�"Z��%=��"^"��]�“��@@”�+"�!#��#/!#��]�#�� to the MIS that makes it easy for marketing managers to access the MIS system and find answers to their questions.

marketing decision support system (MDSS) The data, analysis software, and interactive software that allow managers to conduct analyses and find the information they need.

Sophisticated companies like Harrah’s closely track what people do in venues like Las Vegas. If the data show that some of the company’s clientele favor one property over another, one form of gaming over another, or even one type of show over another, those customers will receive promotional materials tailored to their specific preferences. Slot players are notified of slot tournaments, while fans of magic shows get a heads up when Lance Burton is scheduled to appear.

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a single, intensive source of data and insights to further inform decisions about allocating a firm’s massive global advertising budget. The Conversation Suite includes features such as a 40- foot display showcasing various marketing met- rics and data visualizations grouped by market, as well as a number of touchscreen computers programmed to make digging into the various sources of information shown on the massive platform easy to perform.4

Typically, an MDSS includes sophisticated statistical and modeling software tools. Statistical software allows managers to examine complex re- lationships among factors in the marketplace. For example, a marketing manager who wants to know how consumers perceive his or her company’s brand in relation to the competition’s brand might use a sophisticated statistical technique called mul- tidimensional scaling to create a “perceptual map,” or a graphic presentation of the various brands in relationship to each other. You’ll see an example of a perceptual map in Chapter 7.

Modeling software allows decision makers to examine possible or preconceived ideas about relationships in the data—to ask “what-if” questions. For example, media modeling software allows marketers to see what would happen if they made certain decisions about where to place their advertising. A manager may be able to use sales data and a model to find out how many consumers stay with his brand and how many switch, thus developing projections of market share over time. Table 4.1 gives some examples of the different mar- keting questions an MIS and an MDSS might answer.

Table 4.1 | Examples of Questions an MIS and an MDSS Might Answer Questions an MIS Answers Questions an MDSS Answers

What were our company sales of each product during the past month and the past year?

Has our decline in sales simply reflected changes in overall industry sales, or is there some portion of the decline that industry changes cannot explain?

What changes are happening in sales in our industry, and what are the demographic characteristics of consumers whose purchase patterns are changing the most?

Do we see the same trends in our different product categories? Are the changes in consumer trends similar among all our prod- ucts? What are the demographic characteristics of consumers who seem to be the most and the least loyal?

What are the best media to reach a large proportion of heavy, medium, or light users of our product?

If we change our media schedule by adding or deleting certain media buys, will we reach fewer users of our product?

For MasterCard, the Conversation Suite provides a readily accessible way for marketing managers to see and interact with high-value data and insights without requiring the technical skills that are typically necessary to perform these activities.

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Steps in the Market Research Process The collection and interpretation of information is hardly a one- shot deal that managers engage in “just out of curiosity.” Ideally, market research is an ongoing process; a series of steps marketers take repeatedly to learn about the marketplace. Whether a company conducts the research itself or hires another firm to do it, the goal is the same: to help managers make informed marketing decisions.

4.3 OBJECTIVE List and explain the steps and key ele- ments of the market research process.

(pp. 100–118)

Customer Insights and Marketing It’s getting easier all the time for organizations to collect huge amounts of data. Data are raw, unorganized facts that need to be processed. Analysts then process, organize, structure and present the data so that it is useful for decision making. This transformation creates information, which is interpreted data. But, there is a downside to knowing too much! All of these data can be overwhelming—and not very useful—if no one has any idea what they all mean. As some describe the ocean, “water, water everywhere and not a drop to drink!” can be repurposed “data, data everywhere and nothing insightful to find!”

Enter the customer insight specialists to save the day. At its essence, the idea of customer insights refers to the collection, deployment, and interpretation of information that allows a business to acquire, develop, and retain its customers. Like Cindy Bean at Campbell’s, most companies today maintain a dedicated team of experts whose jobs are to sift through all the information available to support market planning decisions. This group does its best to un- derstand how customers interact with the organization (including the nasty encounters they may have) and to guide planners when they think about future initiatives.

The job is more complicated than it sounds. Traditionally, most companies have oper- ated in “silos,” so that, for example, the people in new product development would have zero contact with anyone in customer service who actually had to deal with complaints about the items they designed. The insights manager is like an artist who has to work with a lot of different colors on a palette—the job is to integrate feedback from syndicated stud- ies, marketing research, customer service, loyalty programs, and other sources to paint a more complete picture the organization can use. As such, this function in the organization usually plays a supporting role across the firm’s strategic business units (SBUs).

For example, to gain greater insight into the preferences and characteristics of those con- sumers who made purchases within a specific product line of soups, a product line manager at Campbell’s could reach out to Cindy Bean’s consumer insights team for help. The team would then gather a wide array of data about the specific types of consumers who enjoy soup from that product line as well as other data such as frequency of purchases by consumer segment and what key factors influence consumption of specific types of soup by consumer segment. Cindy’s team no doubt would deliver this information in an easy-to-understand format to highlight the most actionable insights. This analysis would enable the manager of the product line to determine how to better allocate resources to drive market performance of the products. Like Campbell’s, many organizations are “catching the wave” by adding customer (consumer) insights departments—this growing trend in turn offers a lot of promis- ing job opportunities for graduates who know how to fish for usable knowledge in the huge information ocean. More on using data to gain customer insights in Chapter 5.

data Raw, unorganized facts that need to be processed.

information Interpreted data.

customer insights The collection, deployment, and interpretation of information that allows a business to acquire, develop, and retain their customers.

4.2 OBJECTIVE Understand the concept of customer insights and the role it plays in making good marketing decisions.

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Figure 4.3 provides a great road map of the steps in the research pro- cess. You can use it to track our discussion of each step.

Step 1: Define the Research Problem The first step in the market research process is to clearly understand what information managers need. This step is called defining the research prob- lem. You should note that the word problem here does not necessarily refer to “something that is wrong” but instead refers to the overall questions for which the firm needs answers. Defining the problem has three components:

1. Specify the research objectives: What questions will the research attempt to answer?

2. Identify the consumer population of interest: What are the characteristics of the consumer group(s) of interest?

3. Place the problem in an environmental context: What factors in the firm’s in- ternal and external business environment might influence the situation?

It’s not as simple as it may seem to provide the right kind of information for each of these pieces of the problem. Suppose a luxury car manufacturer wants to find out why its sales fell off dramatically over the past year. The research objective could center on any number of possible questions: Is the firm’s advertising failing to reach the right consumers? Is the right message being sent? Do the firm’s cars have a particular feature and related benefit (or lack of one) that turns customers away? Does a competitor offer some features and benefits that have better captured customer imaginations? Is there a prob- lem with the firm’s reputation for providing quality service? Do consumers believe the price is right for the value they get? The particular objective re- searchers choose depends on a variety of factors, such as the feedback the firm gets from its customers, the information it receives from the marketplace, and sometimes even the intuition of the people who design the research.

Often the focus of a research question comes from marketplace feedback that identifies a possible problem. Volvo, long known for the safety records of its cars, had a tough time competing with luxury brands like Mercedes-Benz, BMW, Lexus, and Audi. How could Volvo improve its market share among luxury car buyers?

The research objective determines the consumer population the company will study. In the case of Volvo, the research could have focused on current owners to find out what they especially like about the car. Or it could have been directed at non-owners to understand their lifestyles, what they look for in a luxury automobile, or their beliefs about the Volvo brand that discourage them from buying the cars. Instead, the company chose to focus on why consumers didn’t buy the competing brands. Managers figured it would be a good idea to identify the “pain points” shoppers experienced when they looked at rivals so that they could try to address these objections with their own marketing activities.

So what did Volvo find out? Its research showed that many car shoppers were too intimidated by the “ostentatious” image of Mercedes and BMW to consider actually buying one. Others felt that too many of their neighbors were driving a Lexus, and they wanted to make more of an individual state- ment. Volvo’s vice president of marketing explained that Volvo owners’ “interpretation of luxury is different but very real. They’re more into life’s experiences, and more into a Scandinavian simple design [of vehicles] versus a lot of clutter. They are very much luxury customers and love luxury products, but they don’t feel a need to impress others.” Based on the research findings, Volvo developed a

Define the Research Problem

• Specify the research objectives • Identify the consumer population of interest • Place the problem in an environmental context

Determine the Research Design

• Determine whether secondary data are available • Determine whether primary data are required —Exploratory research —Descriptive research —Causal research

Design the Sample

•�Choose between probability sampling and nonprobability sampling

Collect the Data

• Translate questionnaires and responses if necessary • Combine data from multiple sources (if available)

Analyze and Interpret the Data

• Tabulate and cross-tabulate the data • Interpret or draw conclusions from the results

Prepare the Research Report

• In general, the research report includes the following: —An executive summary —A description of the research methods —A discussion of the results of the study —Limitations of the study —Conclusions and recommendations

Choose the Method to Collect Primary Data

• Determine which survey methods are most appropriate —Mail questionnaires —Telephone interviews —Face-to-face interviews —Online questionnaires • Determine which observational methods are most appropriate —Personal observation —Unobtrusive measures —Mechanical observation

Figure 4.3 Process | Steps in the Market Research Process

The market research process includes a series of steps that begins with defining the problem or the information needed and ends with the finished research report for managers.

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new ad campaign, showing consumers that it was OK—and even desirable—to be differ- ent. The company even pokes fun at rival luxury brands. In one TV commercial, a sophis- ticated woman sits at a stoplight in her Mercedes-Benz SUV and checks out her makeup in the rear-view mirror. Another woman pulls up next to her in a Volvo XC60—but she’s more down to earth. The Volvo driver looks into her own rear-view mirror. The difference is she makes a funny face to make her kids in the backseat crack up. The voice-over says, “Volvos aren’t for everyone, and we kinda like it that way.”5

Step 2: Determine the Research Design Once we isolate specific problems, the second step of the research process is to decide on a “plan of attack.” This plan is the research design, which specifies exactly what information marketers will collect and what type of study they will do. Research designs fall into two broad categories based on whether the analysts will use primary or secondary data (see

Figure 4.4). All marketing problems do not call for the same research techniques, and marketers solve many problems most effectively with a combination of approaches.

Research with Secondary Data

The first question marketers must ask when they determine their research design is whether the information they require to make a decision already exists. For example, a coffee producer who needs to know the differences in coffee consumption among differ- ent demographic and geographic segments of the market may find that the information it needs is available from one or more studies already conducted by the National Coffee Association, the leading trade association of U.S. coffee companies and a major generator of industry research. Information that has been collected for some purpose other than the problem at hand is secondary data.

Many marketers thrive on going out and collecting new, “fresh” data from consumers. In fact, getting new data seems to be part of the marketing DNA. However, if secondary data are available, it saves the firm time and money because it has already incurred the expense to design a study and collect the data. Sometimes the information that marketers need may be “hiding” right under the organization’s nose in the form of company reports; previous company research studies; feedback received from customers, salespeople, or stores; or even in the memories of longtime employees (it’s amazing how many times a manager commissions a study without knowing that someone else who was working on a different problem already submitted a similar report!).

research design A plan that specifies what information marketers will collect and what type of study they will do.

secondary data Data that have been collected for some purpose other than the problem at hand.

Company reports Previous company

research Salesperson feedback Customer feedback

Internal Sources

Published research Trade organizations Syndicated research Government sources

External Sources

Secondary Research

Customer interviews Focus groups Projective techniques Case studies Ethnographies

Exploratory Research

Cross-sectional Longitudinal

Descriptive Research

Laboratory research Field studies

Causal Research

Primary Research

Figure 4.4 Process | Market Research Designs For some research problems, secondary data may provide the information needed. At other times, one of the primary data collection methods may be needed.

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More typically, though, researchers need to look elsewhere for secondary data. They may obtain reports published in the popular and business press, studies that private research organizations or government agencies conduct, and published research on the state of the industry from trade organizations. For example, many companies subscribe to reports such as the National Consumer Study, a survey conducted by syndicated research firm Experian Simmons. The company publishes results that it then sells to marketers, advertising agencies, and publishers. Access to its data is even available in some college libraries. This database contains more than 60,000 data variables with usage behavior on all major media, over 500 product categories, and over 8,000 brands. Data from Experian Simmons can give a brand manager a profile of who uses a product, identify heavy users, or even provide data on what information sources a target market is likely to consult prior to purchase.6 As examples, popular online sources of useful data for marketers in- clude Opinion Research Corporation (ORC), the U.S. Census Bureau and Bureau of Labor Statistics, the American Marketing Association, and LexisNexus.

Research with Primary Data

Of course, secondary data are not always the answer. When a company needs to make a specific decision, marketers often collect primary data: information they gather directly from respondents to specifically address the question at hand. Primary data include demographic and psychological information about customers and prospective customers, customers’ at- titudes and opinions about products and competing products, as well as their awareness or knowledge about a product and their beliefs about the people who use those products. In the next few sections, we’ll talk briefly about the various designs options to collect primary data.

Exploratory Research

Marketers use exploratory research to come up with ideas for new strategies and oppor- tunities or perhaps just to get a better handle on a problem they are currently experienc- ing with a product. Because the studies are usually small scale and less costly than other techniques, marketers may do this to test their hunches about what’s going on without too much risk or expense.

Exploratory studies often involve in-depth probing of a few consumers who fit the profile of the “typical” customer. Researchers may interview consumers, salespeople, or other employees about products, services, ads, or stores. They may simply “hang out” and watch what people do when they choose among competing brands in a store aisle. Or they may locate places where the consumers of interest tend to be and ask questions in these settings. For example, some researchers find that younger people often are too suspicious or skeptical in traditional research settings, so they may interview them while they wait in line to buy concert tickets or in clubs.7

We refer to most exploratory research as qualitative; that is, the results of the research project tend to be nonnumeric and instead might be detailed verbal or visual informa- tion about consumers’ attitudes, feelings, and buying behaviors in the form of words rather than in numbers. For example, consumer packaged goods (CPG) company Reckitt Benckiser came to believe that for their Finish® dishwashing detergent the best way to compete for market share was to focus on the functional performance of the product. Through their ads, they typically would demonstrate how effective it was at cleaning dishware and glassware, in some cases comparing results to those of direct competi- tors’ products such as P&G (who as a competitor in soap is no slouch). But then, Reckitt Benckiser brought in a market research firm to conduct a series of ethnographic studies (we will cover ethnography later in this section) focused on the observation of families in their homes actually using the product. The result of this research was the realization that a functionally oriented focus on the cleanness of dishware and glassware products resulting from the use of Finish® was masking a more compelling advertising message. This related to the dishwasher’s role (and in turn the dishwashing detergent’s role) as a