Branding Strategy Insider

Sensible Brand Research Has Only One Formula

I recently completed consulting work for two US companies. The first, which we will call Midwest Stores, is a big grocery store chain. A year ago it repositioned its retail brand based on the findings of a conjoint study.

Conjoint research is very revealing. It allows a company to find out what consumers most want from its operation. In this case, Midwest asked 2000 customers to rate the importance of price, products and service.

While all were important, Midwest's discerning customer base actually valued product range above price and service.

Midwest repositioned accordingly, with the slogan 'Every brand under the sun', and increased prices slightly to offset increased distribution and marketing costs. However, sales have shown no discernible increase.

The second company, which we will call Baxters Yoghurt, also had problems with sales. Baxters is a mid-sized dairy, which has lost more than 20% market share in the past three years and was unsure what to do about it.

Its ad agency conducted focus groups with existing customers, which revealed a growing sense of dissatisfaction. Everything from flavours, quality and product sizes to its latest ads were cited as reasons for unhappiness.

Baxters marketing director was unsure what strategic decisions to take to restore the brand's health. There were so many issues and, worse, the managing director was openly dismissive of the 'fuzzy' focus group results.

Both companies were struggling because their market research was deficient, but ironically each held the solution to the other's dilemma. Midwest is a classic example of a company that solely uses quantitative data.

Focus On Consumer's Behavior, Not Their Words

For a man on the verge of victory, Barack Obama was looking increasingly tense on Monday. With the latest Gallup poll putting him 11% ahead of John McCain, you'd be forgiven for thinking that leading the US through the biggest brand-repositioning job in history was already starting to occupy the thoughts of the junior senator from Illinois. But the real reason for Obama's nerves was more immediate: he did not trust the research. If he did, the presidency would be in the bag. However, two words cast a shadow over the optimistic outlook for Obama's team: Tom Bradley.

In 1982, Bradley was the dynamic African-American politician leading the polls as he stood to become governor of California. He was shown to have a clear lead over George Deukmejian, his white Republican rival, and on election night the exit polls predicted a Bradley victory. Early editions went to press with Bradley on the front page as the next governor.

Then the result was announced. Deukmejian had won narrowly. Later analysis suggested that many of the white voters - who had claimed they would be voting for Bradley when asked by a pollster - had actually opted for his Republican rival once they had entered the privacy of the voting booth. Similarly, a large proportion of self-described 'undecided' voters had also voted for the white candidate when the moment came. As Obama contemplates an apparently insurmountable lead, the disappointed face of Bradley looks back at him. There are, of course, many differences between the events of 1982 and this week's election. The social stigma of voting for a black man is surely less, and Obama is in a much more commanding position than Bradley found himself in California. Nonetheless the worries remain. The punditry and predictions are based on a simple, but unreliable, assumption: that people know their own minds and will do what they say they will do.

Nothing could be further from the truth. While many marketers struggle to understand even the most basic issues of their target segment, the consumer in that segment is often equally unclear about their own preferences. I have umpteen war stories of focus group findings and opinion surveys that sent me and my client in the wrong direction from the consumer behaviour we were trying to predict.

Dissecting Market Segmentation

"Everyone from Australia is stupid."

It's a glaring statement and it's wrong. It is incorrect because it assumes that everyone in Australia is stupid. It makes a further assumption: that everyone in Australia is exactly the same. Obviously nobody, in their right mind, would ever utter or accept such a statement.

Yet when we turn to market segmentation, most companies make these kinds of idiotic assumptions on a daily basis. Market segmentation is one of the fundamental components in a strong marketing strategy. Most companies accept the fact that different people want different things and that, therefore, they should have different segments in their marketing plan.

The problem becomes apparent when we explore the criteria that most companies use to segment their market. Take a look at the names of the different segments in your company's market-segmentation pie chart. Chances are you will discover segments that are divided by age, by gender, by social class or, if you work in B2B, by turnover and SIC code. Dividing up the market by a combination of these factors is simple, cheap and it looks effective. Unfortunately, it rarely works.

You do not segment a market because the people in the segments are different.

Building Emotional Connections with Research

The most compelling brands usually connect with consumers at an emotional level. Their benefits are often experiential, emotional or self-expressive.  Certain types of research can help marketers understand which benefits will have the greatest emotional impact.

Following are some of the types of research that one could use to identify these sources of emotional connection:

Laddering – this helps one understand the following links: product or service features and attributes → functional benefits → emotional benefits → underlying consumer attitudes and values →  self-image → self esteem (“I feel good about myself.”). The researcher leads the research participant from brand or product features and attributes to self-esteem through a series of “why” questions. The most powerful levels at which to communicate with the consumer are at the emotional benefit, attitudes/values and self-image levels.

Projective techniques – these help the marketer uncover brand associations that the average person cannot or will not articulate unless asked indirectly. Typical projective techniques include:

o    Sorting (into two piles: “This is the brand,” and “This isn’t the brand” or “This is the brand’s consumer” and “This isn’t the brand’s consumer”) – can be done with the products themselves, images, colors, flavors, textures, sounds, etc.
o    Analogies, including “If the brand were an animal, what kind of animal would it be and why?” or “If the brand were a car, what kind of car would it be and why?”

The Research Trap

One of the pitfalls of the multibillion-dollar marketing research industry is that researchers don't get paid for simplicity. Instead, they seem to get paid by the pound. A true story may be in order.

The scene: The office of a brand manager at Procter & Gamble. The problem is what to do with one of their largest brands. I ask a simple question as to the availability of their research. I'm surprised by the answer: "Research?" We've got a computer full of it. How do you want it? In fact, we've got so much of it that we don't know what to do with it."

A flood of data should never be allowed to wash away your common sense and your own feeling for the market. You'll never see that obvious solution. It's worth reviewing what this flood is washing ashore. I checked in with Robert Passikoff of BrandKeys, my favorite research company. Here are some of his and my observations.

Awareness studies neither link to real customer behavior nor reinforce (let alone create) brand differentiation. In fact, although the phrase, "That's nothing that a whole lot of awareness won't cure" has become something of a research industry joke, those studies keep getting done. Note to everyone: Everybody is aware of General Motors and few are buying their cars.

Segmentation studies get fielded by the sector. True, segments are ultimately identified but are they segments you really want? Or need? Or can actually market to? Often these studies end up identifying individual segments that you can't actually reach via any known media. But there they are. And then there's the problem of changing your strategy to appeal to different segments. When you become everything for everybody, you become nothing in the mind.

The Future of Consumer Behavior

A typical 21-year-old has played 5,000 hours of computer games, exchanged 25,000 emails, SMSs and chat messages, has used a cellphone some 10,000 times and spent 3,500 hours online. Surprised? Well that’s your future consumer.

When I conducted the ‘BRANDchild’ research for my book of same name – the world’s largest study on kids and their relationship with brands - one of the results which took me most by surprise was the number of channels kids are able to handle at the same time. Where adults are able to manage 1.7 media channels at the same time, say, watching TV and reading a magazine, kids can give attention to an astounding 5.4 channels at the same time. To illustrate this multi-tasking, they can watch TV, send SMS messages, surf the net, chat on MSN, listen to music and even devote 0.4 of their simultaneous communications repertoire to homework.

But even more surprisingly, when I recently repeated the study, three years on, not only had the number of channels kids handled at once increased by 0.2, but adult capacity for dealing with multiple channels had increased by close to 0.1. It seems, therefore, that the ever-evolving media environment is not only influencing the younger generation. It is affecting us all and we are all making adaptations to it. This leads to this question: what behavioral changes will we see in future generations vis-à-vis communications strategies and media use?

The answer is straightforward. A lot. But here are two key developments you can expect to deal with in handling future generations of consumer behavior:

Behavioral Targeting: Into the Abyss

The Association of National Advertisers held their annual conference recently. Speaker after speaker addressed the growing popularity of what is known as behavioral targeting as opposed to basing pitches on consumer attitudes, opinions or perceptions.

The ability of the Internet to monitor what consumers are doing by tracking what Web sites they visit is fueling interest in what many call understanding our customer better. I call it getting totally confused by your customers. The result, according to one speaker, will be different messages in different media for different customers. While admitting it will be terribly complex, they feel that this is the way it will be. I say many will be led by all this into the abyss of blurred brands and hopeless confusion from which they may never recover.

Anheuser-Bush dived in by studying "use occasions." Then they launched an ambitious online project that offered entertainment programming named Bud.TV. It turned out to be a bust, so the "content is being rethought." But here's my favorite line from their presentation. "The programming had nothing to do with our brands." I say then, what's the purpose of all this money and effort?

Brand Management: The Prime Directive

Last week I was working for a large international client, running a marketing training program for its key brand managers.

Day one was all about market orientation. In the morning we talked about the barriers between a company and its customers and how, as marketers, we must remove them to build market orientation. In the afternoon I sprang a surprise. We had arranged for focus groups to be recruited at a facility nearby and the marketers had to plan, conduct and analyze some of these and report their results the next day.

It was great on paper, but we ran into a snag. The research company we had hired to run the groups was not keen on the idea of having brand managers with no formal training running their own focus-group sessions. It suggested we should use its professional moderators instead.

Worse was to follow; the head of marketing at the client company agreed. So, rather than illustrating how easy and valuable it was to listen directly to consumers, we demonstrated the exact opposite. My brand managers ended up briefing a researcher and then watching the results from behind one-way glass. Just when you think you have met the prime directive of marketing and got a marketer face to face with customers, another barrier springs up to separate them.

The idea of professional focus-group moderators is a joke. I must have sat through more than 100 groups and the only ones I have ever seen ruined by the moderator were handled by the 'professionals', not by a brand manager keen to run his or her own groups.

Sources of Competitive Information

Earlier in the week I shared my thoughts on how to better understand the competition. The following are sources you can turn to for competitive information:

•    Competitor websites
•    Press releases (there are free online services that can send you daily e-mail messages with press releases on industries and topics of interest to you)
•    Industry analyst reports
•    Financial analyst reports
•    News clipping services
•    FIND/SVP (consulting and research services) and other similar services
•    Harte-Hanks, Hoovers, One Source and other company databases
•    Online database searching services, such as FirstSearch, ProQuest and Lexis-Nexis Academic Universe
•    Services that track advertising spending
•    Search engines and intelligent agents
•    Blogs, chat rooms, message boards, podcasts and discussion groups
•    Trade magazines
•    Trade shows
•    Competitor direct mail campaigns (add a friend or relative to their lists)
•    Your field sales force.  Responding to the information they send encourages them to send more
•    Ex-employees from those firms (may be under your employ now, or from job search databases)

Customer Insight Techniques

Understanding your customer is a never-ending process.  Here are some simple ways to do so:

•    Ongoing customer research, from focus groups and depth interviews to anthropological and quantitative research techniques
•    Customer satisfaction surveys
•    Maintain and monitor customer service/support mechanisms (help lines, e-mail support, etc.)
•    Establish and monitor discussion boards and chat rooms devoted to different customer groups/segments
•    Establish and consult with customer advisory boards
•    Establish customer membership organizations.  Participate in and monitor their events. (Harley-Davidson executives are masters at this.  They attend – and ride in – HOG rallies, talk with their customers at those rallies, observe new product accessories and debrief every HOG rally back at the office for new product ideas and other action items.)
•    Key executives/managers should participate in sales calls
•    Key executives/managers should occasionally rotate through front-line customer service positions
•    Hire employees who are also passionate customers.  (There is one danger with this approach.  Even if you are a passionate brand customer, don’t assume that all other customers are just like you.)
•    New product people (marketers and market researchers) tend to be closest to customers and their needs in most organizations

For most businesses, environmental scanning can also be very helpful in staying abreast of the latest customer, industry and societal trends.  “Environmental scanning” is a fancy term for the following process:

•    Reading a broad cross-section of books and publications of relevance to your business
•    Monitoring any other relevant media
•    Keeping very close track of the emerging trends by counting the number of times certain ideas, needs or concepts are referenced
•    Seeking to better understand emerging ideas, needs or concepts – those that are steadily increasing in frequency and intensity

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