Market Research Meets the “People Factor”
Great market research doesn't always lead to great results. Why? After a close look at sources of friction between managers and market researchers, HBS professors Gerald Zaltman and Rohit Deshpandé have ideas on how the two groups might better see eye to eye.
Knowledge about a market is no cinch to acquire, of course. And though information may have been painstakingly collected, analyzed, and presented by market researchers, it faces an even greater hurdle when the researchers attempt to hand it over to their client company. That is, will it really be used?
According to HBS professors Gerald Zaltman and Rohit Deshpandé, the "people factor" behind market knowledge and its transfer is at least as important as the straightforward information the research conveys about a product or service.
In a highly detailed study of perspectives from both sides of the coin—brand managers and market researchers—Zaltman and Deshpandé began to identify critical points of friction in the manager-researcher relationship. Most importantly, the study helped them identify several reasons why market research either fails to be used or fails to make the impact that it should. The professors offer suggestions for both groups, so that both sides can better understand the other's point of view and use research more effectively.
Even favorable surprises imply a change in the status quo, which in turn may create problems.
—Gerald Zaltman and Rohit Deshpandé
The organizational environment, according to Zaltman and Deshpandé, is a "critical factor" in the transfer of knowledge. A company's organizational structure, for instance, along with the political acceptability of market research results, weighs heavily on whether and to what extent the results will actually be used.
This study is described in Zaltman and Deshpandé's essay "The Use of Market Research: An Exploratory Study of Manager and Researcher Perspectives," which appears in the recently published book, Using Market Knowledge (Sage 2001). Edited by Deshpandé, Using Market Knowledge brings together groundbreaking work by a variety of top-notch scholars on vital issues facing the transfer and implementation of market knowledge now and in the future.
Under the microscope
To study the points where managers and researchers see eye to eye and where they diverge, Zaltman and Deshpandé started by conducting 16 separate interviews with managers and "research suppliers" from Fortune 500 companies and prominent research firms. The two then honed their inquiry further, mailing 800 questionnaires to a cross section of both managers and researchers. The overall response rate was a respectable 44 percent.
Each step led Zaltman and Deshpandé closer to several factors that they've determined can have a decisive effect on the use of market research. These factors include the purpose of the research project, as well as organizational structure of the managers' firms, the degree of interaction between managers and researchers, and the stage of the product's life cycle.
But one of the most crucial determinants of how market research is used, they discovered, is the element of surprise. As a group, the managers in their study tended to be risk-averse; the managers were not likely to embrace research results that caught them off-guard. "If the purpose of research information is to reduce uncertainty (and thereby the risk associated with making a hitherto unsupported decision)," note Zaltman and Deshpandé, "then surprise may not be considered in the same light by managers and researchers."
"The former are charged with making decisions and implementing them, the latter with simply providing previously contracted-for information."
"Even favorable surprises imply a change in the status quo, which in turn may create problems," Zaltman and Deshpandé explain elsewhere in the study. "These are not considerations that managers weigh lightly."
As a result of their study of the sometimes-conflicting perceptions of managers and market researchers, Zaltman and Deshpandé conclude the essay by offering the following advice, in the hopes that both groups—managers and researchers—might better find common ground.
- Managers and researchers clearly have a different perspective on the purpose and value of the research endeavor. Understanding the other's point of view would probably lead to greater use of the research.
- Managers don't like surprises. So researchers who prefer to tackle a more exploratory style of research should be aware of its possible effect on managers. The manager's "comfort zone" for results of exploratory research should be discussed up front. "Managers might themselves try to identify their own 'comfort zones' for surprise," according to Zaltman and Deshpandé.
- Sheer quality of a research report is usually not enough. If the results are going to make a positive impact, the manager and researcher should be developing rapport throughout the project. Trust is key, Zaltman and Deshpandé write, and the perception of that trust will have a great effect on how the report's quality is ultimately read.
- If a product is already at a mature stage of its life cycle, or especially if it is in decline, managers should be open to more exploratory kinds of research.
- Managers should keep researchers abreast of what kinds of decisions will be made and what role the research results will play in those decisions.
- After the results are in, if the managers and research companies expect to continue working together on other projects down the road, it is critical that they discuss why and how the research was used or not used this time.
- Even client companies that seem less likely to actually make use of research results can make temporary arrangements to enhance their use on a specific project.
Knowledge is the lifeblood of any organization, notes Deshpandé in the introduction to Using Market Knowledge. Though managers make decisions based on professional experience and common sense, scientific research will continue to play a key role in shaping their assumptions and subsequent actions.
"And," he writes, "no knowledge is as critical to management, or as elusive, as knowledge about customers, competitors, and markets."