Larry Friedman: ‘The future challenges and opportunities of market research’
For more than 40 years, Larry Friedman Ph.D has been a pioneer in his field. Currently Co-Editor of the GreenBook blog, his career started in academia, before becoming the Chief Research Officer at TNS North America. In 2009 he won the ARF (Advertising Research Foundation) Great Mind In Innovation award.
In the first edition of our Market Research Visionaries, Larry explains how research has evolved, and what today’s challenges are, and what the future looks like.
A whole new world
Market research is nothing new. In fact, Larry explains, the field of market research is more than a hundred years old. “But it’s always been about getting information, and the various methodologies that were used,” he says.
“However, the rise of scientific management in the early part of the 20th century, led to scientifically oriented researchers. Instead of just making decisions based on opinions, these managers wanted data, and that data didn't exist.
“Market research was invented to get the data that marketing managers and senior management needed to make decisions.”
So, that's exactly what they did.
“We generated new data. And various methodologies were used, certainly survey research was a core part of that. But the basis of the business was getting new data.
“However, that’s now changed,” says Larry.
A data-rich world
We’re no longer living in an age where data is scarce. As Larry puts it: “We’re now living in a data-rich world.
How you use that kind of data, and when, and how you integrate it with new data that you may need to still get, requires a very different skillset and mindset than traditional market researchers have.
“This has been a real struggle for people over the past 10 years. I think there's finally some good progress that's being made, but it's still a struggle.”
New platforms, new challenges
Another challenge has been how quickly market researchers have had to adapt to new platforms.
“Digital marketing platforms (DMPs) are core to what marketers use right now,” says Larry. “It’s become central to a lot of companies. So, the future for much of market research is, ‘How do we work with marketers to make those digital marketing platforms more effective?’”
What does this mean in practice?
"It means, how do we find out more about more individuals? And, how do we make use of that information to communicate with them on a one-on-one basis, at a scale of millions?"
“One of the most impactful slides I ever did was at a strategy presentation for a major beverage company,” says Larry. “They had invented a whole new subsegment of that industry some years before, and really had dominated it. It was a huge, huge profit center for the company.
Generic category benefits
“However, the company started losing their edge from a business perspective, and others were coming in and gaining significant share. So I created a slide with three lines on it where I wrote down their brand name, and I said, ‘That equals to generic category benefits’.
“And then, I wrote down on two other lines, two other brands that had been later entrants, and for each one I said they had those same category benefits, but they added different specific brand benefits to it. What the newer entrants did was turn the client's brand into a generic, “white label” product in that category.
“It was clear that their big challenge was going to be finding brand benefits that they could add in.”
I'll never forget the look on the category manager’s face who was sitting in the front row in the room when I was presenting this – he looked like I hit him across the forehead with a baseball bat!
The problem wasn’t that the client didn’t have a great product, the problem was that other companies came to market with the same benefits, turned these benefits into generic category benefits, and added new benefits on top of it.
This meant the client brand became a completely bland brand. It just didn't have the vitality that the newer entrants had.
Over the next few years this brand struggled to find the right brand benefits to include. “Unfortunately, they never really were able to do it,” laments Larry. “It's still a good selling product, but not nearly what it could have been.
“I think about that a lot, because what I did was distill, literally, a hundred pages into three lines, which many researchers find a real challenge to do. I laid out what the fundamental challenge for their brand was, and I did it in a way that they just hadn't even thought about.”
Essentially they thought they had a brand benefit, but what they actually had was a category benefit.
What’s the lesson? “Just because you're first in a category, if you're not continuing to really try and build your brand on top of that category, you may face a significant long-term challenge,” says Larry.
What trends should market researchers be aware of right now? “First is the automation trend,” says Larry. Automation is the future of market research. So how to differentiate? “The companies that are one step ahead are moving more into the consulting end of things, and bringing not just insights to clients, or nice reports, but really doing consulting about what research programs mean for their business.
How to work with automation
Automation is a major trend right now. In fact, the “whole movement towards automation has become absolutely critical. It’s now table stakes.” What does this mean for technology? “What Qualtrics has built and can bring to the market has just had a huge impact on the industry and on clients.”
But automation isn’t enough. Organizations need the ability to translate insights into action. This ability is “ultimately what will help differentiate them for success.”
Want to Discover Insights to Help Your Business Succeed?
March 26, 2020
Social distancing in market research: Pivoting in-person methodologies
March 20, 2020
4 things market researchers need to think about in the time of COVID-19
February 26, 2020
Calling all brand admins: Join the Qualtrics admin training at XM Basecamp Live
February 14, 2020
Major League Baseball’s Scott Harris on surprising insights and the future of research
February 13, 2020