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In theory there is no difference between theory and practice. In practice there is.

I propose that your job as a researcher on the corporate side is to develop a theory of your brand. Your job as a research supplier is to provide research that helps test that theory. It’s really that simple.

theory

 

By Dr. Steve Needel,

Nothing like starting off with a quote from that great intellectual, Yogi Berra. I promise you – no rants about the overhyping of Big Data today. No talk of evolution versus revolution. No mention of disruption or innovation or any of that stuff. In fact, the whole point of this blog is the small stuff that we actually do, day in and day out. What I want to talk about is an approach to marketing research that is straightforward, economical, efficient, and likely to lead to that coveted “seat at the table”.

I propose that your job as a researcher on the corporate side is to develop a theory of your brand. Your job as a research supplier is to provide research that helps test that theory. Your job as an academician or developer is to build new measurement instruments that let us test the tenets of these theories better. It’s really that simple.

Here’s what I mean by a theory of your brand:

  • You should know how consumers use your product category, whether it’s a CPG product, a financial service, or a website. Do they use it the way they are supposed to? Are they using it for unintended purposes (think baking soda)? You should likewise know why consumers use your category. Is it a cheaper alternative? More convenient? It works?  Here’s where ethnography and qualitative research are essential.
  • You should know the same things about your brand, how and why people use it. Just as important, you should know why category buyers don’t use your brand, or don’t use it as often as they could. It doesn’t mean you’re going to do anything about it, but you ought to know the reasons why. We have variety in our choices of products so that a product doesn’t have to do everything possible; knowing why shoppers don’t buy your brand may lead you to the next line extension or new brand. Here’s where qual and quant and neuroscience might start to come together.
  • You should know what drives your product’s sales on a day in-day out basis. Are you deal sensitive? Price sensitive? Advertising sensitive? Are you subject to a lot of activity on social media, and if so, does it matter to your brand’s sales? Do you know who your competitors are and whether their activities affect your sales? This last point is not as obvious as it sounds. I’ve had clients tell me that every brand in the category is a competitor (they are not). I’ve had clients think it’s all about one set of brands when it’s really about another set. There are lots of good tools out there to answer this question. This is where Big Data, modeling, and experimentation come in.

The theory is important because, theoretically (sorry about that) your theory of your brand should drive much, if not all, of your future marketing and your future research. Gaps in your theory (and there will be plenty at the start), or places where you’ve filled in with apocrypha or everyone’s best guess, deserve particular attention. This can be a great excuse for rummaging through data you probably already have. For example, we had a client that was consistently disappointed in their new product performances. We found that their forecasts were off because of bad distribution assumptions. They believed, because their sales force believed, that they got 90% ACV distribution in Month 1. We showed them their own syndicated data that suggested an average of 45% ACV in Month 1 – 90% didn’t come until Month 4. When you build a forecast and execute a marketing plan based on bad assumptions, you get bad results – they always came up short of their forecasts. A good theory about how your business works would fix that.

Your theory should also give rise to testable hypotheses, in the form of “if this is true, then doing this should increase sales”. Likewise, your theory can lead you away from research that’s likely to be non-productive or not actionable. Here are two [simplistic, I grant you] examples:

  • You have a brand that you’ve positioned as somewhat upscale in the category – it has benefits that consumers recognize, which is why the keep on buying you. You don’t advertise much – it’s not in your budget. Marketers should be thinking, “How much can we charge for a brand that is upscale”? Very few companies do a lot of pricing research and when they do, it tends to be driven by the necessity to take a price increase due to cost of goods. New product forecasters, on the other hand, tend not to find much of a price impact when you are looking at +/- 5% or so for your average CPG product. Increasing your price might be one heck of a way to increase profits. Worried about a price gap versus competition? Also test the same increases across the other upscale products in the category at the same time.
  • You have a brand that is built on loyal consumers. Shoppers buy you regularly and frequently and your buyers give you a high share of requirements. You know from past research that this is a category that shoppers don’t “shop”; they come into the aisle, buy the products, and then get out. Your marketing team wants to update the package (because marketers always like to update packages before moving on the next brand). Here’s a case where your theory of the brand says a package change is unlikely to help the brand – it could actually hurt it. This is the time to push back and say, “With everything we know about this brand, why would we consider a package change?”

There’s an old quote in Social Psychology by Kurt Lewin, which goes, “There’s nothing so practical as a good theory”.  I’m all for being practical today.

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12 Responses to “In theory there is no difference between theory and practice. In practice there is.”

  1. joel rubinson says:

    November 7th, 2013 at 8:08 am

    I like this a lot Steve. Really like the concept of deleoping a theory of your brand.

  2. Martin Silcock says:

    November 7th, 2013 at 9:47 am

    Steve,

    Liked the back to basics embedded in your post.

    Good theories also make their assumptions explicit too. This reduces likelihood of arguments that can not be resolved because the base models are built on different foundational beliefs. the other day iI started out writing a list of things one needs to know to say “I understand and can explain fully customers and consumer behaviour”.

    My intention was that this would reveal gaps in understanding and where to focus new research efforts. A sort of checklist. this is what I ended up with

    To be able to say you “understand” customers and consumers one needs to be able to describe and explain

    – what do they do : noticing observing the practices
    – why do they do that : identifying concious and unconscious goals
    – how do they do it : the concious and un-conscious strategies and sequencing followed to obtain their goals
    – when do they do it : the occasions and time-scales that affect strategies, sequences and goals, including frequency rates and cycles
    – where do they do it: how place and context influences the strategies, sequences and goals
    – who do they do it with: the affect and nature of social relationships, cultural norms that influence (constrain and shape choices) goals, strategies, times and places

    Doing this made me realise how much human behaviour and consumption is shaped by the brains goal seeking behaviour and social relationships.

    Finally, people (to reference George Kelly) also personally “construe”, and construct there reality from experiences. His theory of personality starts from explicit axioms that sees all humans as theory creating animals.

    As brands only live exist in peoples minds, we need to understand not just our theory of brand….but how people form theories about brands from what their interactions with a “brand behaviour”.

  3. Steve Needel says:

    November 7th, 2013 at 10:47 am

    @Martin – coming from a social psychology background, the whole Gestalt-based school was big when I was in grad school. Fritz Heider, the father of attribution theory, considered us as naive psychologists, trying to construct causal explanations for the world around us, including the social world. Quaker Oats was big on this concept when I first started in marketing research, so shout-out to people like Dudley Ruch, Mitch Kriss, Craig Sptizer, Mike Kruger, DJ Jefferson, Tom Oakley et. al.

  4. Marie-Anne Simons says:

    November 8th, 2013 at 10:39 am

    Great Steve, I absolutely agree!! Elaborating on this, I think a theory should be preceded by a vision on the market and consumer behaviour preferably based on a scientific psychological framework instead of assumptions or gut feeling. Do you agree?

  5. Steve Needel says:

    November 8th, 2013 at 10:49 am

    @Marie-Anne – yes, I do agree, but I wouldn’t limit it to a psychological framework. I’d take my starting point from anywhere. I might even include the assumptions, gut feelings, and apocrypha as a starting point if I had nothing better. If I’m testing deductions from my theory, then those gut feelings etc. that were wrong should drop out. I’ve found that good marketers have hunches, gut feelings et. al. that are often close to reality, so I don’t want to dismiss them out-of-hand. But I do want to test them.

  6. Andrew Jeavons says:

    November 8th, 2013 at 11:04 am

    I am reminded of the famous quotation from Annette Karmiloff-Smith – “If you want to get ahead, get a theory.” An exposition of what a brand theory is would be very useful. The question really is about the theories or heuristics shoppers use . We might have theories – do the shoppers conform ?

  7. Martin Silcock says:

    November 8th, 2013 at 1:56 pm

    Of course we have to remember that like any observation the tools we use will affect what we perceive…as the tools themselves are products or “children” of our theories.

  8. Marie-Anne Simons says:

    November 9th, 2013 at 3:02 am

    Thanks Steve! I do agree with Martin and that is why I am convinced a psychological framework is needed to be able to analyse our empirical based results. I support the idea of a conceptual integration meaning that the various disciplines within behavioural and social sciences should make themselves mutually consistent and compatible like in natural sciences instead of working from an individual ‘gut feeling’ principle. Today, unlike natural sciences, training in these disciplines (and practice) does not regularly entail a shared understanding of the fundamentals of the others. Principles from sociology, psychology, anthropology, human behavioural ecology etc. etc. contradict to each other and are often based on assumptions on what we think is the meaning or logic of what we perceive and observe. Wouldn’t it be great if we join forces and create a framework together as a foundation for future consumer behaviour theories?

  9. Steve Needel says:

    November 9th, 2013 at 9:08 am

    @Marie-Anne – fully agree. My only point was that psychology is not necessarily the starting point – it could be anywhere that makes sense to the theorist. Simon Blyth did a great piece a few years back using an archaeological approach to understand consumer behavior. Social Media’s impact might best be understood by sociologists. And so forth.

  10. Marie-Anne Simons says:

    November 11th, 2013 at 10:02 am

    Hi Steve, I understand your point. Absolutely, we need more than ‘just’ a psychological framework. What I was trying to say is that, in my opinion, we in fact need a multidisciplinary framework based on insights in consumer behaviour (emotion, motivation, cognition) that are compatible and mutually consistent. I fully agree with the importance of for example disciplines like archaeology, anthropology, biology, ecology and evolutionary psychology together with psychology, sociology and socio psychology. I think all these sciences should join forces to generate better insights. Does this make sense to you?

  11. Steve Needel says:

    November 11th, 2013 at 10:07 am

    Sure does, Marie-Anne

  12. Rebecca Colwell Quarles says:

    November 13th, 2013 at 11:51 am

    My inter-disciplinary doctoral education (cognitive psychology, social psychology, and sociology focused on communication processes) drove home the point that no theory, indeed, no discipline, can completely explain phenomena (e.g., brand loyalty). So I like to design studies that test the strength of different theories in particular situations. For example, in early studies of HIV/AIDS prevention, we found that social norms were more powerful than perceptions of risk in altering attitudes and behavior about safe sex. This insight became the central point of a highly effective outreach campaign. Also, research suppliers who have studied the social sciences and have a taste of theory construction might just be good partners in developing, as well as testing, brand theories.

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