Muder Chiba
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Vice President (South Operations) – NFO MBL India

Why Research?
The Village grocer personally knows all his customers, their credit rating and their purchase foibles. He is able to process this data on his own because of the limited number of people he deals with. He is his own MR, intelligence and credit rating agency. The success of his business is built upon on this knowledge of his customers.
The Metro businessman on the other hand is dealing with vast bodies of consumers, most of whom he will never knowpersonally. He needs to have the same understanding of his customers as the Village grocer. The only way to obtain this is recourse to scientific methods of data collection and analysis - Market Research. The decisions on what should be stocked, when to reorder, how to promote, which new product to put on the front shelf, which of the brands to go with, would yet need to be taken by the Metro businessman using his marketing judgement. The same applies to the Village Grocer, except for the fact that the Metro Businessman’s scale of operations makes the cost of an error very high. This then is the nub of the issue.
The chances of making an error in judgement is mainly because of dealing with consumers who the marketer doesn’t know, in places he’s never seen, in situations he’s never been. MR then is to be used to reduce the chances of making an error.
And the decision to research or not would depend on the likely cost of the error. If the error in judgements is likely to prove very costly either in terms of customers lost or launch momentum loss or corporate objectives loss, then the decision to research at every stage of the product/brand/market development process would be valid.
An OTC product marketer did not pre-test advertising before it was given long-term intensive exposure on TV. A post-test showed that the enormous amount that had been spent on the communication had all been a colossal waste as the basic premise of the communication had been ‘incorrect’. The marketer would have done well to test out the advertisement before committing enormous amounts of scarce resources to it. The decision to research was justified.
Another large marketer entering the branded spices market conducted detailed market research at every stage. It conducted representative test markets and used them to predict market shares and to work out the financial implications of the entry. It based the decision of entry on the financials so worked out and its corporate imperatives. The decision to research the market well, albeit a high-cost one, was necessary as the decision had far-reaching consequences for the company.
Yet another confectionery brand was being re-launched for the third time after failing earlier. The consumer and the trade were likely to be sceptic about the brand and it was imperative to have it all right before it hit the market. The decision to research at every stage and all elements of the marketing mix was warranted.

When not to research?
An elementary rule is “when the benefits of MR don’t justify the costs”. The decision to research fully before is sometimes not justified when timeliness is of essence - a promotion or advertising that is to coincide with an event is conceived at the last moment and the marketer’s judgment backs it.
Where topicality is the issue. Imagine pre-testing every single Amul Butter hoarding and waiting for the report before sending it out for painting!
Also when the cost of the decision going wrong is small - a localised promotion or tactic, a one-off ‘ship-in-the-night’ communication, a small brand tactic.
Consider the marketing manager of a leading paint company, which is a firm proponent of researching every issue. The ad agency came up with a series of ads, which were very creative and stood ‘paint advertising logic’ on its head. The manager however felt strongly that the ads were just ‘right’ - and felt that the ads would be ‘killed’ by a ‘logical’ research approach. The decision, taking into account various factors such as the brand status and the splits available in the media, was ‘not’ to pre-test the ads - to release them. Take the proverbial marketers’ risk. To hedge his bets, the manager did commission an immediate post-test. Sometimes the best decision that the wise user of market research can take is not to conduct it. And sometimes the best decision would be to pre-test an ad at every stage. Whatever the reason to research, the cost of the research in terms of both the time and the actual cost must be weighed against the cost of decision and the likelihood of research improving the decision-making quality. It makes sense, for example, not to pre-test an ad where there is no major threat (in the marketer’s judgment) and it costs 10-20 per cent of the total budget allocated to pre-test the ad. And sometimes, as in the ‘paints’ case described before, it makes little sense to pre-test if no decision-making help is going to come out of it.
To summarise, the Wise research buyer knows when the decision to research is justified - when the apparent costs are actually an investment in making better decisions - in making better use of scarce resources. Also knows what the MR report stands for, an aid to her judgment and in no way a replacement for it.

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