Q&A with PSRC MD RJ Esteban on Practical Market Research

Raul Juan Esteban is Managing Director of marketing research firm PSRC. He is Past President of the Marketing and Opinion Research Society (MORES) of the Philippines; Country Representative of ESOMAR, the global research association; and past Chairman of AGB-Nielsen. He shares his insights about doing research the practical way.

Q1: The late icon Steve Jobs once mentioned that consumers don’t know what they want until you show it to them. Knowing that, why should companies do market research?

A: Steve Jobs is one of the greatest technology and marketing thinkers of all time!  Only a fool would argue against him, in public. But, people tend to over-simplify or even exaggerate some of his quotes… such as this misconception that Steve Jobs/Apple did not do marketing research at all.  Today, if you go to the Jobs-At-Apple section of their website you would actually find an opening for a ‘Survey Operations Manager/Market Research Analyst’.

Many of Steve’s beliefs on marketing seemed to suggest that he, and perhaps Apple as a company, had veritably quite a discerning point of view on the application of marketing research to business needs. For instance, in the context of creating new technology products Steve probably did not use MR.

“Very rarely can consumers predict something that they don’t even quite know they want yet… No market research could have led to the development of the Macintosh” –

Steve Jobs

On the other hand, he recognized that on many other business instances, MR was useful.

“However, possibly before the product is on the market, or even after, is a great time to go check your instincts with the marketplace and verify that you are on the right track. Usually when you show people something they’ll say … that’s fantastic or give you feedback.”  – Steve Jobs

As a marketing researcher, naturally I’m of the firm opinion that the discipline can help out in any stage of the marketing management process, from market understanding, target selection, marketing mix development, and managing the implementation and yes even on innovation. It can be an aid to making decisions on a wide variety of marketing issues and problems in the product life cycle… from product birth to death or from brand conception to resurrection. It is rare though for a marketing man to conduct MR at each and every stage. One has to be purposeful when deciding to use MR. It is usually best used during times of marketing blindspots, such as in circumstances with fast evolving consumers, higher competitive risks, uncertainties in the marketplace. Consumer revelations can drive one’s business efforts forward.

A CEO of a leading fast moving consumer goods company once said, “We will live or die by our level of consumer intimacy!”

Q2: What key questions should a start-up brand or company be able to answer in their market research?

A: In the Philippines, many start-up entrepreneurs have a pretty firm, sometimes even unyielding, idea of the product they want to offer. They probably even have their own idea of how to communicate and sell. But only a few have considerable information about the market they want to serve leading to many possible business queries:

• Target market selection.  Who best to offer to? Possible are the more likely early adopters?

• Market and product fit.  Will people like my products or service? Do I add any value?

• Sustainability. Do I serve a particular market need or fill up a gap in the marketplace?

• Competitive positioning.  How different am I from others?

• Viability. What is the market/category size?  How big ashare can I reasonably capture?

I find it useful to have an adequate understanding of the primaryneed/s of a marketing person for me to determine how best to assist. For instance, would he require:

• Inspiration

• ‘Insight-ment’

• Opportunity identification

• Validation

Q3: What practical market research tools can you recommend if firms want to implement Do-It-Yourself Market Research and why?

A: First I would need to address the issue of when to do DIY.  Regardless of what you DIY, the main motive is to save money. So I guess if you don’t have much to do and have a fair level of research know-how then it may indeed be ok to consider DIY marketing research.  The other side of the coin, which is usually less thought about, is to evaluate how much ‘more’ money (or benefit) you would have if you had a specialist do something than to DIY.  After all, MR is an investment not just an expense. Deciding then to DIY, or not to DIY, requires some estimation on Cost-Benefit (OR Benefit-Cost).

Assuming you do intend to do DIY, perhaps it may be prudent to do less of the bigger, more complicated, statistically definitive (which require more sampling rigor) research activities.  The easiest to do would be more qualitative approaches such as in-depth interviews, FGDs, consumer immersions, observations. If you require some ‘numbers’, and when appropriate, maybe use online platforms/panels or do quick/small sample intercept interviews, etc.

These DIY projects may be not as robust, but they can give you a more personal, even face-to-face, encounter with consumer behavior and attitudes.

Q4: What are barriers to good market research?

A: Not all research are created equal. Which leads to the point that some are better than others. Often I find the beginning and the end of a marketing research activity to be the most challenging.  Good MR starts with a thorough understanding of the ‘real’ business issues. Careful definition of the marketing problem facing management is essential in designing a well thought-out and purposive research approach.

“The formulation of a problem is often more essential than the solution!”

At the other end of the activity, data transformation is likewise another challenge.

How do you present the information to maximize learnings? How do you interpret observations into meaningful insights that incite marketing action? Research is not just a matter of asking questions and adding up people’s responses.

A common adage against market research comes from Henry Ford…

“If I had asked people what they wanted, they would have said faster horses.”

If one takes things literally, I can imagine how someone would come to a conclusion that people just wanted faster horses.  But with a little more ‘deduction’, the more operative word (the human need) is ‘faster’ NOT ‘horses’.

The output we should strive to produce must be revealing and sometimes even foretelling.

But the times are changing and many other things may impact the quality of our work:

• Respondents are harder to reach, less accessible

• Companies have lower research budgets

• Need for faster marketing response which leads to less full bodied research designs/output

• Even traffic affects efficiency in MR activities

Q5: The failure rate of new products is quite high, even for multinational companies doing market research. What should marketers and entrepreneurs watch out for to reduce the chances of failure after doing market research?

A: Some things I realized early in my MR career are:

• Many companies have been successful even without marketing research

• The presence  of market research does not guarantee success

What’s even more humbling is to find out that the former beat the latter. It’s easy then to be cynical about the real ROI of market research. After all, success depends on array of factors, many of which may be situational, organizational, or execution related. Marketing research is just a tool to reduce risk, not a magic bullet.  But companies do try to maximize what they can benefit from it. For instance, traditionally the role of the client marketing research professional was simply to oversee the conduct and outsourcing of MR activities. Today we see an increasing trend in expanding the focus of these people to more insights generation, business intelligence and strategic planning. Concurrently, job titles have been transforming to include labels such as consumer insight, market intelligence, customer analytics, knowledge managers. These days the broader job description includes an expectation of ensuring that the information become more profound and that the learnings permeate a wider audience within the organization.

Q6: Blue Ocean Strategy authors Kim and Mauborgne are against ‘outsourcing your eyes,’ or not conducting your own market research. Why should external market research firms be tapped?

A: I guess forcing a choice between outsourcing or in-house marketing research activities may result in a misrepresentation of the many advantages and disadvantages of each.

External market research firms have helped in a many portions of the marketing stages of a lot of companies, locally and globally. I dare say that the MR industry has made significant and positive influence to shaping marketing history. Despite being just a century old, the global MR industry has grown to be about 44 Billion USD.

External market research firms have:

• Developed high standards in representativeness, significance, validity

• Refined many data analysis methods

• Introduced new marketing concepts

• Implemented scientific methods and theories

• Included new technologies & faster tools

• Emulated client thinking

• Provided a fair degree of marketing consultancy

… and many more.

But our real strength lies in our consistent fascination in evaluating, understanding, translating the experiences of the most important members of the marketing landscape… our consumers/customers.

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