How Marketing is Evolving:
We recently talked to Dr. Steve Perkins of Burke Inc. on some of the most pressing issues that marketers face today: How has the Internet transformed market research? What challenges do blogs and social networks pose for today’s market researchers? Should companies be less focused on Marketing ROI today and more on accountability to measure effectiveness? When does company-wide brand advocacy become bad for Marketing? Read our complete interview to learn more on the latest insights on marketing and research.
Since our last interview, you’ve returned full-time to the market research industry. What are some of the changes that you’ve observed in customer research objectives, methods and technology?
In the eight years that I’ve been away from the market research industry, data gathering has been revolutionized by the Internet. Internet usage has grown tremendously and online data collection today equals established phone methods. It has also proved to be cost efficient, quick and actually yields accurate samples. One of our biggest worries early on was whether we could get decent samples based on just the Internet, but the results and Internet penetration in developed countries has basically laid this argument to rest.
On the client side, things haven’t really changed much. The same marketing questions are being asked and most market research still centers on branding, segmentation and pricing. Companies continue to focus on getting to know the customer, understanding the competition and making sense of the marketplace. Today’s methods have changed in the research industry, but it hasn’t changed the issues.
How has this new model of faster information and response impacted client expectations?
We still spend about the same amount of time on the design and interpretation but the data gathering takes only a quarter of the time it used to take just ten years ago. Today’s technology also ensures that the collected data is in good shape, so we don’t have to scrub it and analysis is faster too, which shortens the project cycles and yields faster results.
Does this make the client more responsive in terms of taking action on your research and recommendations?
I don't know if clients are necessarily moving faster because of the immediacy of results. Often, it depends on the kind of research. If the study addresses a tactical issue like a pricing, they tend to take quick decisions based on the results. For instance, pricing studies based on gasoline price hikes that impact manufacturers and consumers alike lead to speedy implementation. If the study is more strategic in nature like overall brand image or segmentation, the client may not be compelled to move on it right away. But the point here is that clients have results that they can quickly execute upon, if needed.
What is the impact of social networking (YouTube, MySpace, etc.) and blogging on market research?
I think companies are very interested and curious about using these tools to gain customer insights. The tricky thing is when companies get users involved with blogs, YouTube, MySpace and others, they have to sort of let go for it to really work well.
This is completely different from the past when companies created and controlled the brand totally. Today, if a company starts using blogs and MySpace, it must take into account the fact that customers are going to sort of create their own version of its brand. It can be real good thing but the company has to realize that it is handing over some of the control to the consumer.
Companies have to be confident that their brand has a good core meaning and can withstand whatever people come up with and connect to its brand. But if a brand is just developing or is not self confident, it may be a difficult to manage.
From an insights perspective, these new methods can really help companies try to track trends, understand customers and analyze data in a qualitative sense. In a perfect world, there would be regular validation of these insights with quantitative research.
On the other side of the equation, there is a growing appetite for customized, mobile information which is leading to micro segmentation. How does that affect marketing?
Yes, there is a huge fragmentation in the market. Companies are always seeking profitable market niches while trying to understand the total picture at the same time. They are also trying to find a way to handle and unify the multiple information sources, different ways the consumers can interact with each other and the brand.
Part of it's generational, too. Many of today’s teenagers and young people interact with the market very differently. Their appetite to consume, communicate and adapt is huge but not necessarily to understand and learn. Reaching them effectively is going to be the next big challenge for marketers.
What are companies doing to unify the massive proliferation of data, obtain deeper consumer insights and make meaningful decisions?
I think it's still very difficult for companies to handle the volume of data that comes from the multiple consumer touch points and make sense out of it. Data mining is an integral function of database marketing. Airlines, for example, are among the leaders in analyzing not just marketing data, but all data gathered for accounting and other reasons, to understand their customer and market behavior.
Customer relationship management (CRM) systems have been around for some time to manage customer data. Companies really have to realize it's a huge investment and not a one-shot effort. They need to build an entire function that can handle customer data, analyze it, and continually get value out of it. It's an ongoing effort that takes a lot of time, money and people resources.
Do you still see a push for ROI from marketing and marketing research?
I think there's still a lot of interest in ROI, even though it may have peaked and slowed down a little bit. Initially, systems were set up to measure the ROI just because everybody else was doing it. Now, companies have taken a step back to better understand what they are trying to measure and how to do it better.
There’s also an increased desire for greater accountability from marketing to ensure that companies are actually getting value for the dollars being spent. We do quite a bit of work on “linkage”, which is basically relates different marketing variables to behavioral variables, which helps us better track the marketing effectiveness. A good example is linkage between marketing, sales and customer behavior. We are moving beyond simple models of customer satisfaction to studying the impact on marketing campaigns on customer attitudes and how it affects their buying behavior.
This is the basis of the means-end theory that we discussed in our last interview. While it sounds great on paper, it is still qualitative and hard to measure – how has it fared practically?
It has become a little bit more pervasive in consumer goods and people are using these concepts increasingly. Clients are starting to ask for value maps, where a product attribute is connected to the different consequences of using a product, which are then connected to the values for an individual. Admittedly, it is easier for consumer goods than B2B, but as we get better quality data, measures of behavior and modeling methods to understand those linkages, we’ll see more applications. One of the most successful applications of this model is in politics to understand voter behavior, both in the 2004 and current elections.
What is the impact of outsourcing and globalization on research, data collection and regionalized decision-making?
We are seeing a movement to use resources from all over the world, not just for data gathering, but for survey creation and data analysis too. International data collection is still a challenge and there is an increased use of local research partners. Data collection via Internet is common in Europe, but phone or traditional face-to-face methods are most effective in countries like India and China. This will soon change with the increase in the wealth around the world and Internet penetration in developing countries.
For global brands, companies need to scrutinize the data and the strength of the brands for each country, as there's necessarily no one universal solution for all countries. I guess that's one reason why there are research companies like ours that can help companies understand the brands and take the optimal decisions at international, regional and local levels.
How has the role of marketing evolved in the past few years?
For one thing, the life expectancy for a CMO these days is less than two years, which does not bode well for the position or the function. It takes a really strong CMO to infuse the whole company with sort of a marketing spirit that drives the company and create more strength for the marketing function and marketers.
In many large corporations, customer insights managers have replaced marketing research managers, and their job responsibility has become pretty amorphous. They are no longer focused just on promotions and price of new products but also have to share consumer viewpoints with HR, finance, accounting and all other parts of the company. Again, this affects how the marketing function is viewed within the organization.
A mantra for many companies in the last few years is that marketing and therefore, branding is everybody's responsibility within the organization. I think that this good and bad. It's good that people in the front lines, in call centers, sales or customer service, understand the meaning of the brand, its attributes and why it is important to the company. But when marketing’s role shifts to such a broad scope, it dilutes the strength that the marketing’s function of a creator and sustainer of the brand’s meaning. It may be a necessary evolution for the future but is still a challenge for marketers.
In closing, do you think marketing is still about the customer?
Marketing is still about the customer but all the interest in ROI and accountability is making marketers "conservative". Companies are much more cautious these days about the kinds of marketing efforts they will try. While they're thinking about the customer, they're most definitely thinking about a fairly immediate pay back too. So, it may be difficult for companies to think real creatively and out of the box. Hopefully, research results are still making it easier to choose the best tools and means to reach the customer.
See the 2005 interview with Dr. Perkins.
Steve Perkins is a Senior Consultant in the Dallas office of Burke Inc, full-service custom marketing research company. Prior to that, he served as Associate Dean for Graduate Programs in the School of Management at The University of Texas at Dallas for eight years. Previously he taught marketing research at The Pennsylvania State University and Vice President of Marketing Sciences at M/A/R/C.
Steve’s background in applied and academic research allows him to study clients’ marketing issues with practicable as well as rigorous methods. He specializes in segmentation, branding, and choice models. He has published in several journals including Journal of Marketing Research, Psychometrika, Journal of the Academy of Marketing Science, and Industrial Marketing Management.
Steve earned his PhD in Management Science at the University of Texas at Dallas, and holds BA and MBA degrees from the University of Texas at Austin.