Memo to Marketing

Marketing research must become a model for innovation rather than support the mere incremental administration of brands.

The marketing function has been under increasing pressure to deliver. Its challenge is to see new business opportunities before they become obvious, to lead the market and not be led, to have a proactive vision rather than a copycat mentality. To accomplish that, a “facts-based” analysis — using quantitative data from customer surveys, market studies and other sources — can help tremendously, enabling companies to take calculated risks with greater confidence. But such approaches can sometimes be dysfunctional, leading to endless statistical analyses that obfuscate key points. Or they might focus on yesterday’s issues instead of tomorrow’s opportunities. Companies thus need a broadened approach to marketing research that takes into account conversations with customers, observations from the field and insights from executives, among other alternative sources of valuable information. The goal is to enable — not stifle — innovation. To this end, marketing must perform seven key tasks within an organization.

Create a meeting place.

Marketing research needs to facilitate a dialogue between those executives with challenges and those with solutions. Any solution should be based on more than just mere opinion; at the same time, the brainstorming does not need to be narrowly data driven. The aim is to find nonintuitive solutions, that is, value-creating approaches that could be beyond the scope of the research. In other words, research data should enable people to be curious, to ask, “So what?” and to think the unthinkable. But that process must be part of a dialogue — hence, the need for a meeting place.

Consider Nestlé S.A.’s launch of LC1, a new yogurt. In the early 1990s, the company’s yogurt business was losing market share, despite much input from marketing research on how to reformulate the product, the packaging, the advertising and so on.

But then Nestlé learned about Yakult, a fermented milk-based drink produced by Yakult Honsha Co. Ltd. that contains probiotic bacteria. The health-based product was enjoying considerable success in Japan, and Nestlé’s managers were intrigued. Receptive to new ideas, they discussed Yakult at an open-ended brainstorming session with a wide range of participants, including people from R&D. At this meeting place, the atmosphere was open and nonthreatening, and the participants were more than willing to bounce around new ideas. As a result of this collaborative environment, the company decided to add probiotic bacteria to its yogurt — and the LC1 success was born.

Consider radically new opportunities.

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