By Roger Pe
WHAT is the difference between a salesman and a brand builder?
A salesman commoditizes his products and expects the cash register to continously ring merrily for him. He is sometimes a business copycat with a “Zagu mentality”—one who minimizes risk by lowering his price against prevailing market winds and does not care if his brand benefits are still relevant to the market.
A brand builder constantly innovates and improves his product. More important, he adapts to the business climate as it changes with the times. His advertising messages get noticed, connect and engage with consumers. His moves are spot on.
He does not believe in guesswork. He knows his business war and creates a plan with marketing savvy. He positions himself to strategically zero in on his target. He is able to do all of these because he does not sweep market research under the rug.
There are many products that do not become brands and, eventually, become brand failures. Blame it on the hit-and-miss salesmen who do not begin with the basic: market research.
“Everything begins with consumer market research, but businesses rarely undertake such studies for new product development and innovations, even testing new advertising campaigns,” says market-research expert Germaine A. Reyes, cofounder and managing director of Synergy Market Research and Strategic Consultancy.
The Philippines has seen millions of pesos wasted from failed new product introductions or mediocre advertising campaigns. “Even companies go bankrupt or retrench people, simply because research was not done at all, results were ignored, or research was improperly done,” Reyes laments.
To minimize chances for failure and maximize chances for success, it is imperative that one must think like a brand builder. “Do your homework. Do your research,” Reyes says.
What is market research? The etymology of research (re-search) comes from the Latin word sercier, meaning to go around in “circles” till one finds the answer. Reyes says market research is “like crime-scene investigation work—forensics to investigate not the crime scene, but the consumer scene.”
Smart marketers use it to know where your brand stands compared to competition. “Your innovation efforts for your brand that address consumers’ unmet needs can also be determined by a good market research,” she adds.
It is also a great way to test product and advertising concepts, including key messages to evaluate which ones your target customers can relate to.
Here is Reyes in a much deeper conversation about market research, its role on brand success and why you should invest on it now:
What is a great market research?
A great market-research study is one that achieves the objectives set for the study, but also provides other leads to achieve greater, strategic growth. Some examples are:
A focus group discussion (FGD) originally conducted to understand consumer perceptions toward a particular brand can also help sharpen a brand’s positioning and identify specific areas for improvement in a brand’s advertising executions.
Study to determine reasons for the weakening of a brand that can also unearth insights into a new product innovation for a potential brand relaunch.
A customer satisfaction study that provides idea on product
quality and service provision enhancements but also emerges insights on relationship handling, specific communication for certain phases of the business, advertising and PR leads.
Why should companies invest on market research?
Market research is the first step in doing business. As Peter Drucker, the father of modern management, preached, “The purpose of business is not to make a profit, but to create a customer.”
The hallmark of the world’s biggest companies and most valuable brands is strong marketing and innovation anchored on their in-depth understanding of consumer brands superior to the competition.
No less than Steve Jobs insisted that development of technology must begin with consumers not in the laboratory. Indeed, everything begins and ends with the consumer.
What are the pitfalls of doing a business without market research?
Global research studies have consistently shown that a major reason for failure in business start-ups (>85 percent) and new product launches (>97 percent) is a lack of understanding of consumers.
Companies big and small have fallen into the trap of misreading the market and not developing a thorough understanding of consumer needs and wants, tastes and preferences, and validating if consumers would choose their brand over competitors.
An innovation that’s not hinged on a relevant consumer need will just be an invention because it answers a question that nobody’s asking.
How advanced is market research in the Philippines?
For the local subsidiaries of large multinational companies (MNCs), especially in the fast moving consumer goods (FMCG) sector, as well as for certain top 1,000 companies, the market research practice is far more advanced versus local counterparts.
The local companies, however, view research as a cost, rather than an investment, in building their knowledge about their customers in order to enhance and fit their products and services better with their customers.
This can put the local companies at a serious competitive disadvantage in the marketplace. We believe there remain substantial opportunities for local companies to drive their revenues and profitability by undertaking more comprehensive and in-depth consumer learning programs.
This is to make sure that consumers will continue to buy their brand and be resilient from competitive efforts. We need more CEOs who ask business questions to its internal groups, challenging the status quo and asking for a validation of their hypotheses or gut feel in order to stay ahead of the competition.
We need them to think of market research as an investment in order to make more targeted decisions rather than a trial-and-error decision-making type. A colleague once said, “need to postpone success [by doing research] rather than fail on time.”
What makes a great market-research company?
The end-all or be-all of great market research is not just to provide data, but to succinctly understand what’s working or not, how they can improve on their performance and what could be options to consider to make better, more informed decision-making.
This is much the same way that a king consults with his sage for words of wisdom—just like King Arthur and Merlin in Camelot. The market-research company serves as the think-tank and/or consumer consultant for the client-company.
Can you name a good case study with a good market research?
A petroleum company once was interested in purchasing a small competitor that it believed was the market leader in a niche that it was interested in. The market research revealed that it was not well-known to consumers as it was initially thought.
Likewise, the brand didn’t have the equity that the company assumed it did. So they put off plans for the purchase and saved a couple of hundred million pesos.
A company planning to introduce a new brand in a category that has few players thought that just by creating a lower-priced brand than the leading brand can effect switching.
It was found that lower price, per se, has to be coupled with a compelling reason (a differentiating factor other than just price) to effect switching from the leading brand, as there is hiyang factor to contend with.
Mothers of a certain socioeconomic group segment apparently were looking for something compelling to enable them to switch from their current brand.
Why is market research good for advertising campaigns?
In the words of advertising guru David Ogilvy, market research allows client and advertising agency to “test” their executions to obtain critical feedback on message comprehension and reactions, recall and purchase intent.
This should be done before millions of pesos are spent in final commercial production and the media to maximize mileage and avoid waste.
I have learned from my training in BBDO that a strategic campaign with a not-so-good execution is still better than a nonstrategic campaign with great execution. I am still a great believer in this.
How did you begin your career in market research?
I started in the advertising industry, conducting both qualitative and quantitative research for campaign development, serving as the extended research arm of our clients then, who did not have their own market-research group in their respective companies.
We provided inputs for strategic directions of advertising campaigns. The parlance for this eventually became “account planners.”
I graduated from the University of the Philippines with Bachelor of Science and Master of Statistics degrees. At this time, I endeavored to connect my learnings in statistics to the outside world.
When I started working, I ensured that when I talk about statistics and results, the layman’s perspective is set in place for better appreciation and adoption by decision-makers and customers.
I was trained by key research executives of BBDO New York. This is where I learned the strategic use of market research in advertising and brand development. This included knowing how BBDO’s proprietary tools can help emerge a brand’s SWOT [strengths, weaknesses, opportunities and threats], and key positioning learnings for strategic campaign development.
Our creatives then couldn’t move without the inputs from research re the consumers and their mind-sets. Even at that time [early 1990s] when “localization” was not yet a by-word, I recommended and helped localize the BBDO proprietary tools in the Philippine setting to ensure their relevant application in this market.
My biggest mentor was Mr. C. Patrick Garner, who was a Sergio Zyman close comrade. Zyman is touted as the Steve Jobs in the beverage or, probably, even the FMCG business.
Mr. Pat Garner continuously drove the business questions and utilized market research to obtain leads and/or answers to those business questions. My Coca-Cola stint helped me grow extensively and intensively in the use of market research for business decision-making.
I got ingrained with Pat’s principle: Research that not only gives the “whats,” but also the “so whats” and “now whats.” I’ve constantly endeavored to ensure that market research gives these. Otherwise, I feel that it’s shortchanging the users or customers with the power of market research in helping their brands and business grow.
What are some of your achievements and recognitions in the industry?
There’s not much market research awards provided in the country, but we have helped a client win awards in the recently concluded Quill Awards because of the studies we’ve conducted for them.
We have success stories to share: A real-estate companies sell their project developments in record-breaking time, given the relevant recommendations on how to position their project and tweak or improve their offerings.
A utility company, understanding the drivers for satisfaction, which, in turn, led to development of programs that benefited consumers.
Fine-tuning a utility company’s positioning for an innovative product, which helped alleviate consumer pain points. In another real-estate company, we provided inputs for the modernization and redevelopment of its flagship commercial center.
A telecommunications provider in the early-stage development of the broadband Internet market, not to mention the successful product launches in food and beverage industries.
What does it take to be a good market researcher?
Good market researchers should constantly be curious and want to learn the business and industry they are working in. They need to constantly ask “why” and should be willing to challenge current and/or proven notions, relating these with market realities and environment.
They should be bold in saying whether the product offering is good for launch, needs to refine before launching, or not launch at all. Some market researchers are “nice” in that they recommend launch of a product when the research says otherwise, or just base their recommendations from one metric when the other metrics are telling you something else.
From a client’s perspective, it is desirable for a market researcher to have a strong appreciation of any industry-market-company-brand to be able to design an appropriate consumer learning program that can identify key consumer insights, which can be leveraged as part of the client’s business plans and marketing strategies.
How would you like to be described as a market researcher?
We are a husband-and-wife team and we would like to be described as the market-researcher tandem, a sage business partner, a unique researcher with a synthesizing mind.
What is your brand like, your core competence and why should marketers engage with you?
From a three-time client: Synergy is not only very reliable and trustworthy in undertaking different types of market-research projects (qualitative or quantitative), but also effective and productive in proposing recommendations that have proven to be right on-target to deliver business results for three different clients in three different industries.
Other clients acknowledge Synergy is very innovative (unlike other agencies) and has the capability to customize research solutions according to a client’s research needs. In Germaine’s words, “The consumer is not a data point; no two consumers are alike.”
When clients engage Synergy, we assure them that we will immerse ourselves in their business and take on the CEO and brand person’s hats, so that they will receive inputs, leads and learnings that they can use already for their short- to medium-term planning.
Would a product reach success without market research?
Yes, because there is always the element of luck in business, but this is no guarantee. Once competition starts to grow, though, it becomes very difficult to compete.
Some companies engage in market research only when their market shares start to dwindle. This is instead of being able to defend their market position and continuously develop new avenues for increased volume and market share.
From a three-time client: In my own personal experience, I have learned that every time I attend an FGD or a consumer interview or a trade visit, there is always something new you can learn that you can adopt or adapt for your own business. Because wisdom, accummulated from knowledge plus experience, improves over time.
Other things you want to mention about market research.
I have attended conferences both in the Asia-Pacific region and in the US, and there are always talks about the need for market researchers “to up their game more than ever before.”
Clients want to engage senior market-research people who are able to share credibility in the boardroom, who can offer compelling recommendations on a client’s business objectives.
This trend benefits the agencies that have a closer or more focused relationship with clients. I would like to say that we’ve been doing this for the past 16 years and have seen the benefits to the business of our clients.