Market research helps build brands

Published in Philippine Daily Inquirer, March 19, 2006

Not too many mid- to large-size firms appreciate the invaluable use of applied market research in marketing and building brands. Often, the sentiments are the same i.e. it is an expensive exercise, it merely formalizes what the company knew all along, the results are not conclusive or directionally indicative, etc.

In many cases, the outcome may not be satisfying due largely to gaps in the preparation of the market research brief. The research brief is highly important in the commissioning of any research project. The quality of the research is relative to how well and clear the research briefing has been conducted and how the discussions and agreements before the actual research have progressed. The old adage “garbage in, garbage out” largely applies in this case.

What makes up the research brief?

At least seven critical elements must be present in any research brief. These are the research background, research objective/s, respondent profile or potential target market, methodology, sample size, timing and budget. The details of the brief may vary as a result of a discussion between the research agency and the marketer (the Agency’s client). However, at the onset, the marketer must be clear on the usage of a particular research methodology and the expected learning that can be derived from it.

Research background. Provides an overview of the company and/or brand and the scenario leading to the need to conduct research. Research objective/s. Defines and lists the reasons for conducting research. Likewise, defines the learning parameters and what the marketer expects to know from the entire research process. Respondent profile. Describes the potential target market and/or respondent group. This includes the demographic, socio-economic and psychographic information, if available.

Research methodology. Describes the preferred methodology for mining insights. The initial research brief may define the preferred method; nonetheless, in a discussion between the marketer and Agency, the methodology may be modified, retained or changed.

Sample size. This refers to the number of people, called respondents, who will be part of the research process. The actual number depends on the type of research that will be mounted i.e. whether qualitative or quantitative. Qualitative tests require less number of respondents while quantitative tests must have a minimum number of respondents statistically acceptable to represent the universe being studied.

Timetable. The timetable defines when the marketer expects to get the results of the study. The Agency along with marketer agrees to a timetable that works backwards from the first presentation date.

Budget. The marketer provides the Agency a parameter of his budget. Nonetheless, this budget is often not carved in stone. Depending on the outcome of the discussion of the research method and process, the cost may vary likewise. As long as marketer understands the implications of any changes that impact on cost, most marketers are supportive of the change.

How can market research build brands?

Applied consumer market research is one of the most effective tools that can be used to provide for a brand’s direction. There are different forms of consumer market research. Some of the more effective and commonly used methodologies include the focus group discussion (FGD); Usage, attitude, image survey (UAI); product placement test; advertising pre-test, retail audit and the customer satisfaction survey.

Focus group discussion (FGD). The focus group discussion is a qualitative study that allows deep mining of insights from a representative potential target market. Each FGD can have anywhere from six to eight participants. While not statistically acceptable and data needs to be further validated by quantitative research nevertheless, the results of the FGDs are often used to set the direction of the brand. Depending on the respondent profile and details of the research study, FGDs may cost anywhere from Php60,000 to Php120,000 per group.

Usage, attitude, image survey (UAI). This type of quantitative survey mounted among the target market makes use of a highly structured questionnaire that helps determine the level of consumption of a brand and its competition. Likewise, the outcome of the research also determines the consumers attitude, likeability, perceptions and associations around the brand and its competition. The results of the research help determine the brand’s most favorable and strong associations that can be otherwise visual or copy related and may be sustained in present and future communications materials. The geographic scope of the UAI and sample has implications on the final cost of the study. It may range from a low of Php350,000 to over a million pesos.

Product placement test. This type of research test can be done through an initial small sample and further elevated into a full blown quantitative research. The objective is to obtain the target market’s acceptance of a product or its derivative, determine how the product is actually used by consumers, appeal of the product as well as areas for improvement. Depending on the sample, profile and objectives of the product placement test, costs can range from a low of Php60,000 to Php350,000.

Advertising pre-test. This type of quantitative research test is mounted before any commercial airing of a brand campaign. Due to the high cost of advertising, it is often wise for brands using television as a major medium to have their advertising campaign tested before nationwide airing. Reputable market research agencies have their own proprietary versions of the advertising pre-test. Nonetheless the objectives for testing remain the same for all and these include determining the ability of the ad to rise above the media clutter or the advertising material’s level of intrusiveness; ability to communicate the brand’s value proposition, product freight/window and brand personality; ability of the ad to effectively motivate the target market to buy the brand. Most creative ads engage the viewer unfortunately a good number stop at this stage and fail to move the buyer to buy the product. The advertising pre-test is a very efficient tool in determining whether a brand’s advertising is simply engaging or is truly highly effective in persuading the target market to buy the brand. Likewise, at an early stage the marketer is able to determine the ad’s strength and weakness giving the marketer sufficient time to build on the strength and get rid of the weakness. This means that the marketer need not spend millions or in some instances billions of advertising money simply to find out that the advertising is not working. Pre-tests can cost from a low of Php180,000 to a high of Php450,000 depending on the sample.

Retail audit. This is an efficient way to determine the level of off-take of products in store shelves. While gross sales are usually the norm of many firms in assessing the performance of the brand, nonetheless consumer off-take provides a more accurate description of the brand’s performance in the market. Depending on a company’s incentives to the trade, sales loading can happen where retail outlets turn in volume purchase orders. Nonetheless, these orders can be sitting in the warehouse or in store shelves. On the other hand, a retail audit provides an accurate picture of the market’s acceptance of a brand as the data reveals consumer movement from the store shelves. Information that can be derived from retail audits include which SKU variant or size is invariably being bought heavily; how many units are being moved out per store, per geographic area, etc. in a certain period; how is the category and its brands performing, etc. Retail audit costs vary based on the recency of the data and the category. This can range from Php350,000 to as much as Php650,000.

Customer satisfaction survey. This survey provides an effective way to measure the level of satisfaction the consumer has when using the brand. Is the target market truly elated when using the brand, will he or she recommend the use of the brand, what did the consumer like or not like about the brand, etc. Learning from this research tool can help the marketer institutionalize the consumer offer and process and improve on any downsides.

Research costs vary depending on the objectives of the study, sample size, etc. Nonetheless, these costs can be negotiated with the provider. What is significant is that when used effectively, these research tools provide an effective brand direction. The initial cost is minimal compared to the outcome of a possible disastrous wrong brand direction and strategy.

Nevertheless, one must recognize that it is the marketer’s expert use of these tools that ultimately helps build brands.