In this presentation, I review the status of information and research within companies, and discuss issues and constraints pertaining to the more effective use of information in business and marketing decision making. These touch upon the way in which research is managed in companies, as well as how it is viewed by the executive. To do it well, requires a mind-set change, even a cultural change in many executive teams and companies. Even the talk of "big data", is meaningless unless the company is receptive to the information and its eco-system is prepared for it.
3. “In the new era, big data will power consumer products and services.”, Analytics
3.0, HBR, December 2013, pp65 – 72.
“Data creativity” is mentioned as an important driver of success.
Google & Amazon use data to enable consumers to make fast decisions.
We are told that better information enables companies to make better decisions –
there is empiric evidence for that.
Yet, “The people creating data have little understanding of how others in the
organisation use that information…. The solution is not better technology; it’s
better communication between the creators of data and the users,…”, Data’s
Credibility Problem, BHR, December 2013, pp84 – 88.
4. So why is it not used more often - or better? If yes, why are
some countries like China using successive product prototypes
to “launch and refine” products - instead of researching
them?
5. In my mind,
analytics are as important as creativity in business.
“Marketing is becoming a battle
based more on information than on sales power.”
“It is more important to do what is strategically right
than what is immediately profitable.”
Kotler
The better you understand your market and its opportunities,
the better you will be able to apply creativity. These two
elements are the linchpins of marketing: know what to do,
then do it better than anyone out there… whereas insights
enable you to do the “right thing”, creativity makes you do it
the “right way”.
6. Why does an organisation need information?
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Information is required in a business for three main reasons:
1. To identify market, competitive and consumer gaps/ opportunities the company can
profitable fill – this involves both internal and external information sources;
2. To evaluate and monitor company progress according to these objectives – this involves
understanding the role of internal data as well as external data in monitoring and
managing the company;
3. To reduce the risk involved in decision making for the executive – from knowing where
the sources of profit lie, to producing the right marketing material, to pursuing the right
target segments and value propositions, to knowing what actions worked and what
does not.
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• Although no amount of information can eliminate business risk entirely, being informed is
imperative to success today.
• Not being properly informed, means decisions will be made anecdotally, or dependent upon
individual opinions. In my experience, the opinions of most executives are suspect!
• This is dangerous in business, as not everyone will always have the right opinions.
• Information assists in balancing real insights with so-called “gut-feel”.
The better the information within the business within these areas, the more
objective the business decision-making process will be and the less likely it is that
competitors will catch the company off-guard.
Yet, the value and use of information in a company, depends upon a supportive
ecosystem. Many organisations are “closed systems”.
7. Why do many companies spend a fortune on research,
yet it is never used?
The statistics are frightening:
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In surveys from SA to the US, it is stated that upwards of 90% of research reports are never
used.
In most large companies, the same research is often conducted by different departments,
most of them unaware it already exists elsewhere within their company.
Most companies do not use their own internal data, even if they have the people and
technology to use it. To this day, many banks do not know how profitable any given client is!
I recently had a senior executive of a very large multinational company tell me that his SA
operation spends upward of US$3million per annum on consumer research, yet he cannot
remember when last anyone made a decision based upon it. He stated that most executives
do not even know what is being researched!
Despite having been involved in many consumer segmentation studies, I can maybe think of
three companies that have ever used the data properly.
This is as true for other types of research… unless the company is a global multinational with
a history of research protocols… and then research is often used as a crutch instead of a
strategic tool for decision making. Many global multinational companies research SO MUCH,
that they lose the competitive advantage a new innovation gave them at inception.
8. Why do we not analise and use research properly?
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Multivariate statistics, hardly ever understood, let alone used. That makes the talk
about “big data” very suspect, my feeling is that it will become another “buzzword”, despite the fundamental importance of it to business. Yet, at least we now have
a debate about information in companies again - for years it was dormant.
Big data analytics, hardly ever used:
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We are also obsessed with the past as researchers, not as much with the future, hence
we are often viewed as dragging a company back, instead of pushing it forward.
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Not because the people and techniques are not available, because business does not know what to
do with it – or do not attach enough importance to it.
Often the “business eco-system” does not know what to do with information. Despite tomes being
written about information systems in companies, information as decision support is still in its infancy
in most.
Yet, there will be companies that use it well. But like with bank information systems, CRM programs
and many other initiatives in marketing and business over the years, its use will be limited to a few
visionary companies willing to adapt how they operate to incorporate the impact of big data.
Most banks and telecommunications companies still do not have a “single view” of a client, despite
the topic of relationship management and pricing being 40 years old.
To me, it is because we view the role of research wrongly, we are so concerned about scientific
accuracy, that we ignore the importance of experimentation, qualitative research and informal
techniques. We even forget the importance of desk research. Research should be an enabler of
creativity, not a deterrent.
Trend analysts have also taken over from researchers, sadly. As has strategists, that use
their data, but reduced the analysts to nothing more than data generators.
9. Why is research not at the executive table?
• In most companies, research and information is hardly re-presented at a
senior level.
• It is often mediated through many levels of management, many of whom
have no understanding of what the role of research is and what it can do
for a business. Because information also yields a degree of power, it is
often discounted or even ignored. It is a political tool for some executives.
• This makes it difficult to be noticed at executive level, more so when
findings contradict convention.
• Yet, no company can operate without financial information - which is
historic, yet it seldom uses research, which is an indicator of its future!
10. If yes, why are most researchers comfortable to remain
analysts and scared to make decisions?
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In fact, most of us enjoy sitting behind the desk. We believe that is our job.
Many are still methodology obsessed.
Large, multinational research companies and management consultancies are more
interested in selling their own proprietary methodologies (for obscene amounts of
money), than in solving client problems.
Most researchers are very uncomfortable to use internal data. Why?
Most researchers cannot think holistically, they need to start connecting the dots
from multiple layers of information. If they do not, the IT people will.
Research is populated by an over-supply of analysts and an under-supply of
conceptual and creative thinkers.
In my experience, even a sense of urgency lacks in most researchers (do we remain
academics at heart?).
11. The status of data and information in companies, is
largely a function of corporate culture.
12. As researchers, we are also too blinded by science that
we no longer have any common sense.
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Akia Morita, founder of Sony, a keen observer of people, leveraging his insights to become a
genius of product innovation.
Steve Jobs, Apple – does research have to be empirical, can it not be the observation of
people connected with insight into the ability of technology?
Our own Sol Kerzner, despite market potential research “proving” there is no market for Sun
City at the time - he famously dismissed it – to create an iconic destination in the eighties and
early nineties.
There are many such examples. Multinationals have often lost a competitive advantage
because their validation research took too long.
13. As researchers, we do not realise that to get
results, you have to be human first.
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Many researchers believe marketers must come to them - that will never happen, unless a
marketer really understands the value of research – and they are very rare.
You have to make yourself indispensable! That requires being visible, likeable, out there.
It requires you being there where decisions are made, not forcefully, but subtly. Making sure
the right audiences have and understand the information they need when they need it.
But in an organisation, you are an executive first, then a researcher. Like an accountant is
also an advisor, not just a number cruncher.
In my experience, few disciplines are able to make you as strong on executive insight, as
understanding research, markets, consumers and brands. It enables you to handle any
problem, because you are able to dissect it down to its fundamentals.
14. Yet, there are positive signs…
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The debates between IT and marketing is heating up.
The declining credibility of marketing and the general questioning of
marketing results. Too much flash, too little substance. Research can help.
Increased competition at a global level… more companies, from more
territories, fighting for less business.
Declining margins in most industries, making it imperative that better
decisions are made.
The rise of so-called “big data”.
A re-discovery of research and analytical methodologies.
Convergence of IT and marketing, sadly, from the side of IT. IT is winning this
war, not marketing.
15. What has to change.
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Understand the business, its strategy and its objectives.
Understand the role of marketing within that.
Understand what information is required to support that.
Stop being an analyst - but understand how to use analytics right.
Ways of working.
Attitude – they wont come to you, you need to go to them.
How we translate data into decision support.
Be at the right place at the right time. Walk the corridors.
Create networks.
Make sure you view information from what it means about solving problems, not
just what it says.
16. Some examples I was involved with recently.
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Decision criteria. Why one market lagged another.
A brand decline, when it started and what drove its decline.
Dissect a brand diagnostically to identify its lag factors (where does the problem
lie?).
A large sponsorship brand, which team/ event sponsorships drive the desired
brand attributes? What can be culled?
17. A typology I often use to define what types of
information is required by companies.
18. The strategic marketing process and its
components.
Market opportunity
analysis
Situational
analysis of
• Markets, sizes,
growth rates,
drivers, inhibitors
• Customers,
needs, segments.
• Market
demands,
PESTLE.
• Competitors,
capabilities,
Strengths,
Weaknesses,
Perceptions.
• Relative won
brand strength
and position.
• Internal (staff)
and supplier
environments
Strategic marketing
process
Marketing strategy
implementation
(tactical marketing)
Day-to-day
marketing
Target
market
objectives
Branding &
positioning
Implementation & control
of marketing
strategies
The
marketing
mix
Meyer & Lane (Eds). 2009. Strategic Planning and the Marketing Process, Oxford University Press, S.A. ISBN 978 0 19598 7065; page 17 Fig. 1.5
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19. The types of information or research.
Market opportunity
analysis
Environmental
analysis;
Competitive
Situational
analysis;
analysis of
Company
•Customers
•Market
Capabilities;
demands
Industry trends
•Competitors
•Macro
environment
•Internal
environment
Strategic marketing
process
Customer needs
& distinctive
segments;
Value proposition
development
and testing
Marketing strategy
implementation
(tactical marketing)
Advertising and
product concept
development
research;
Target
Concept
market
objectives
evaluation;
Advertising&preBranding
positioning
and
post-testing
Day-to-day
marketing
Customer
satisfaction;
Brand health;
Business
performance;
ImplementaCustomer churn
tion & control
and the reasons
of marketing
strategies
for that
The
marketing
mix
Meyer & Lane (Eds). 2009. Strategic Planning and the Marketing Process, Oxford University Press, S.A. ISBN 978 0 19598 7065; page 17 Fig. 1.5
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20. Strategic and tactical information.
Market opportunity
analysis
Situational
analysis of areas
The
•Customers
•Market
demands
•Competitors
•Macro
environment
•Internal
environment
Strategic marketing
process
Marketing strategy
implementation
(tactical marketing)
Target
market
objectives
that are generally referred to as “strategic marketing
Branding &
information”
positioning
What is
referred to as
Day-to-day
“tactical
marketing
marketing”
“Monitoring
and control” is
seen strategic
Implementation & control
marketing
of marketing
processes
strategies
The
marketing
mix
Meyer & Lane (Eds). 2009. Strategic Planning and the Marketing Process, Oxford University Press, S.A. ISBN 978 0 19598 7065; page 17 Fig. 1.5
20
21. A useful example of the most commonly-used metrics
as identified in a US survey of marketers.
Firms using measures
(per cent)
Rated top for assessing
performance (per cent)
Awareness of brand or specific value
proposition
78
2
Market share (volume or value) – by market,
segment or value proposition
78
Relative price (what you pay for what you get
and how that stacks-up against rivals)
70
37
Complaints from customers (dissatisfaction
level)
69
45
Consumer satisfaction
68
46
Distribution/availability (of network/ airtime/
products and services)
66
Total number of customers – or by segment
65
Perceived quality/esteem of products/ services
64
Loyalty/retention (or churn levels)
64
67
Relative perceived quality (of products/
services)
62
62
Although brand
awareness is an
important measure, it
is not a sufficient
indicator of success.
Compare the
difference between
that people measure
and consider
important!
36
48
40
35
Meyer & Lane (Eds). 2009. Strategic Planning and the Marketing Process, Oxford University Press, S.A. ISBN 978 0 19598 7065; page 321 Fig. 10.1
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