The Art & Scienceof Interpreting MarketResearch Evidence

D.V.L. Smith and J.H. Fletcher

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The Art & Scienceof Interpreting MarketResearch Evidence

The Art & Scienceof Interpreting MarketResearch Evidence

D.V.L. Smith and J.H. Fletcher

Copyright 2004 John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester,West Sussex PO19 8SQ, England

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Library of Congress Cataloging-in-Publication Data

Smith, D. V. L. (David Van Lloyd)The art & science of interpreting market research evidence / DVL Smith and JH Fletcher.

p. cm.Includes bibliographical references and index.ISBN 0-470-84424-8 (alk. paper)1. Marketing research. 2. Qualitative research. 3. Statistics. I. Title: Art and science of

interpreting market research evidence. II. Fletcher, J. H. III. Title.

HF5415.2.S558 2004658.8′3--dc22

2003067249

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN 0-470-84424-8

Typeset in 10/12pt Garamond by Laserwords Private Limited, Chennai, IndiaPrinted and bound in Great Britain by Antony Rowe Ltd, Chippenham, WiltshireThis book is printed on acid-free paper responsibly manufactured from sustainable forestryin which at least two trees are planted for each one used for paper production.

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Contents

Foreword vii

Preface ix

Acknowledgements xi

1 ‘New’ market research 1

2 Not a science, but a scientific approach 15

3 Data-rich intuitive analysis 27

4 Analysing the right problem 37

5 Understanding the big information picture 49

6 Compensating for imperfect data 61

7 Developing the analysis strategy 83

8 Organizing the qualitative data 91

9 Organizing the quantitative data 105

10 Establishing the interpretation boundary 129

11 Applying the knowledge filters 149

12 Reframing the data 169

13 Integrating the evidence and presenting research as a narrative 179

14 Facilitating informed decision-making 195

vi Contents

15 Developing holistic data analysis 211

16 Guide to the supporting training module 217

Notes 219

References 225

Glossary of holistic analysis terms 229

Index 231

Foreword

It is a great pleasure to write a foreword to this book. I believe that thecontents have the potential to lead a major step forward in the way in whichmanagers in organizations use and apply evidence and fact-based knowledge tomake decisions.

It is stunning that across wholly diverse industrial sectors – for example, look atmarket leader characteristics all the way from high technology at Dell Computersto marketing grocery and household products at Tesco stores – we are finallyrealizing that those who know more outperform the rest. Superiority in learningand sustaining that advantage through the constant search for new insights andbetter understanding of the drivers of customer value in the marketplace hasproved to be one of the most critical corporate competencies. Yet, it is a sourceof competitive advantage we have underestimated so much that we have noteven found a name for it.

We do know, however, that enhancing capabilities in learning faster and betterthan the competition to build sustained competitive advantage through superiorknowledge requires far more than acquiring techniques and technology for datacollection and analysis. The volume of data that the technology can produce,and the precise measurement that data collection and analysis tools can provideare important resources. However, at best they are part of the total array of cluesand insights that build superior understanding of the marketplace. To believethat they are the only ways to generate and test new ways of doing things is asfatuous as pursuing the tired debate about the relative merits of quantitative andqualitative research designs. Such introspective obsessions lead us to miss thereal point.

That point is the prime goal of: building understanding and insight; sensing andanticipating change; and value innovation for superior performance. Importantprogress towards meeting this elusive goal can be made by emphasizing theinterpretation of the whole array of evidence available, regardless of type, notsimply reporting data, and working with decision-makers to develop effectiveand sustained learning processes. The approach in this book provides a valuableframework for implementing these priorities.

There can never have been a time when the need for evidence-based knowl-edge as the basis for management decision-making was greater. It is timely for

viii Foreword

market research professionals to consider their future in this new scenario andthe ways in which they can best add value to decision-making processes.

Professor Nigel F. Piercy

Warwick Business SchoolThe University of Warwick

Preface

The last few years have seen the arrival of ‘new’ market research. Gone are thedays when market research posed as a quasi-academic activity that only flirtedwith the business decision-making process. Today, market researchers are muchmore focused on improving the quality of business decision-making.

This arrival of new market research has presented the industry with an excitingchallenge. This is, how best to communicate to its client base (and also to newgraduates entering the industry) exactly how new market research operates. Thisbook addresses this issue.

• It provides a comprehensive review of the frameworks that today’s newmarket researchers use to draw together different types of, often imperfect,qualitative and quantitative data, and explains how they apply this evidenceto successful information-based decision-making.

This introduction to how new market researchers now interpret data will beof interest to those fascinated as to why so many of the existing textbooks onmarket research bear little resemblance to how market research really operatesin practice. Specifically, our account will be of particular benefit to:

• University graduates who have recently taken up posts as market researchpractitioners, either on the client or agency side.

• Users of market research data who need an overview of how modern marketresearch now operates.

• Lecturers on, and students of, market research, who may wish to incorporateour practical insights into their courses.

• Individuals working in central and local government involved in evidence-based decision-making.

In sum, the book is aimed at individuals who want a simple synthesis of theway in which market research analysts are now going beyond their traditionalmethodological approaches, and are today operating with a more powerful setof data analysis techniques in making sense of customer evidence.

x Preface

Supporting training module

To help educationalists and trainers who wish to run a module on the dataanalysis principles raised in this book, we have prepared a ten-unit lecturecourse that mirrors the content of this book. This is available in the form of aseries of Microsoft PowerPoint charts. For details on how to obtain these chartsvisit Wiley’s website: www.wileyeurope.com/go/smith. This supporting trainingmodule will:

• Help trainers in market research agencies convert the ideas in this book intoa training course that could be used to introduce their new graduate traineesto the principles of ‘new’ market research.

• Assist lecturers on market research courses in colleges and universities tosupplement their ‘orthodox’ teaching on market research with an up-to-dateaccount of how many market research practitioners now operate.

In addition – working in conjunction with the supplementary points we makein the ‘Notes’ section – the training module will help bring alive, with concreteworked examples, many of the general principles outlined in this book.

Acknowledgements

Deciding on the final shape of a book that provides a fresh look at the dataanalysis craft necessitated a considerable amount of drafting. We continuallyhad to check whether our synthesis of existing theory and commercial practicewas pitched at an appropriate level for our audience: newcomers to marketresearch. This placed considerable pressure on Christine Rooke, who typed thisbook, and we would like to start this acknowledgement by thanking her for herprofessionalism and patience in bringing this book together.

We would also like to thank Anne Smith for editing the various drafts, andfor helping to make the book, what we believe, is now an accessible and user-friendly introduction to data analysis for those coming from either an arts orscience background. Thanks also to Paul Costantoura for his insights on howbest to engage the reader.

In preparing the book, it was helpful for the authors to be Directors atCitigate DVL Smith, part of Incepta Marketing Intelligence, the strategic marketintelligence group. This meant that in writing this book we were able to drawon the expertise of various colleagues experienced in innovative data analysis.In particular, thanks are due to Andy Dexter for his ideas, and for supplying anumber of specific quantitative examples.

Thanks are also due to Gavin Mulholland, who contributed some extremelyuseful illustrative practical examples, and to Ian Horritt for his helpful observationson various aspects of Internet surveys, and to John Connaughton for his variouseditorial contributions, designed to help make sure that we struck the appropriatebalance between the art and science, and the theory and practice of commercialdata analysis. Finally, a big thanks to Jo Smith, for helping us, throughout thewhole process, to make difficult decisions about which of our data analysis ideasshould go forward into print, and which should, for the time being, remain onthe developmental drawing board. So in many ways, this book is a Citigate DVLSmith team initiative. Thanks to you all.

1 ‘New’ market research

Summary• Market research is moving away from its roots as a discipline that was

detached from the business decision-making process, and is now moreactively engaged with decision-facilitation.

• This shift has required new methodological thinking: an ‘holistic’ analysisapproach that provides clients with a rounded view of what all their(qualitative and quantitative) marketing evidence is saying.

• The new approach also requires analytical frameworks that com-bine hard market research data with prior management knowledgeand intuition.

• These new frameworks must be disciplined: intuitive thought can bepowerful, but it can also be wrong. The new holistic approach to dataanalysis therefore needs to be based on the rigorous evaluation ofprior management knowledge, as well as drawing on conventional dataanalysis methods.

• We introduce a ten stage guide to analysing market research data inan ‘holistic’ way. The ten steps are: analysing the right problem; under-standing the big information picture; compensating for imperfect data;developing the analysis strategy and organizing the data; establishingthe interpretation boundary; applying the knowledge filters (what weknow about the survey process); reframing the data (to give us freshinsights); integrating the research evidence and telling the researchstory; decision-facilitation; and completing the feedback loop (evalu-ating the effectiveness of the research data in achieving a successfuldecision outcome).

• In sum, in this opening chapter we explain how the evidence availableto market researchers is changing, as a prelude to outlining the criticalthinking skills – the interpretation power – needed to master the newworld of information.