Exploratory Research Design

In the context of marketing research, every research problem is unique in its own way, but almost all research problems and objectives can be matched to one of three types of research designs—exploratory, descriptive, or causal. The researcher’s choice of design depends on available information such as nature of the problem, scope of the problem, objectives, and known information. Exploratory research design is chosen to gain background information and to define the terms of the research problem. This is used to clarify research problems and hypotheses and to establish research priorities. A hypothesis is a statement based on limited evidence which can be proved or disproved and leads to further investigation. It helps organizations to formulate their problems clearly.

Exploratory research design is conducted for a research problem when the researcher has no past data or only a few studies for reference. Sometimes this research is informal and unstructured. It serves as a tool for initial research that provides a hypothetical or theoretical idea of the research problem. It will not offer concrete solutions for the research problem. This research is conducted in order to determine the nature of the problem and helps the researcher to develop a better understanding of the problem. Exploratory research is flexible and provides the initial groundwork for future research. Exploratory research requires the researcher to investigate different sources such as published secondary data, data from other surveys, observation of research items, and opinions about a company, product, or service.

Example of Exploratory Research Design:

Freshbite is a one and half year old e-commerce start-up company delivering fresh foods as per the order to customer’s doorstep through its delivery partners. The company operates in multiple cities. Since its inception, the company achieved a high sales growth rate. However, after completion of the first year, the sales started declining at brisk rate. Due to lack of historical data, the sales director was confused about the reasons for this decline in sales. He prefer to appoint a marketing research consultant to conduct an exploratory research study in order to discern the possible reasons rather than making assumptions. The prime objective of this research was not to figure out a solution to the declining sales problem, but rather to identify the possible reasons, such as poor quality of products and services, competition, or ineffective marketing, and to better understand the factors affecting sales. Once these potential causes are identified, the strength of each reason can be tested using causal research.

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Focusing on the Why

How do we inspire people to take action such as buying a product or service? Everyone wants to know! Well, author Simon Sinek says the answer lies in the Why, the centermost part of his Golden Circle.

Imagine a bullseye target with three rings (such as the one in the above image); the outer ring is What, the middle How and the center is Why. Simply stated, the What is the product or service you provide. The How is everything that you or your company have done to improve upon or create the What. In other words, all the selling points of the product or service. And finally, the Why. The Why is the place where the purpose or belief behind the company is stated and hopefully inspires a person to action. Ideally, they relate to the company’s core beliefs. This is the Golden Circle, and according to Sinek it explains all human decision-making behavior.

Sinek states that all human decisions, such as “should I buy this product?” occur in the limbic system, the part of the human brain that is directly responsible for feelings of trust and loyalty. Interesting to note, the limbic brain’s reaction to a company’s core beliefs (their Why) is not logical and lacks the capacity for language. From this understanding we gain important insights into what drives a person to make a purchase. It’s not the description of what a company does or how they do it, although those can be beneficial in supporting the decision. The How and the What do not sway a consumer to buy; it is the Why that compels humans to purchase a product or service.

Sinek repeats his statement twice for emphasis, “people don’t buy What you do, they buy Why you do it.”

Will an understanding of The Golden Circle affect marketing success? Sinek gives a definitive Yes!

As an example Sinek uses is Apple computers.  

As we can see Apple’s What is great computers.

Their HOW is an offering of greater creative freedom, less viruses, user-friendly interface, etc. All the cool things MAC computers can do.

And finally the WHY. In the case of Apple, we see a very strong belief and ideology emanating from the company. They believe in challenging the status quo and thinking differently as Apple’s Think Different marketing campaign declared in the late 1990s. The Think Different campaign has been Apple’s boldest “Why statement” to date and is still credited with its success nearly 20 years later. Take a look at an example, “Here’s to the Crazy Ones”, and see if you feel anything bubbling up…

Once consumers made the “Why connection” with Apple, the bond has proven nearly unbreakable. So strong is the loyalty, in fact, that people are willing to purchase, not only their computers, but all the other products Apple has released, including iPhones, iPads, etc.

Sinek notes that every incredibly successful company (such as Apple) has done so through clearly showing and explaining why they are doing what they do. As he points out, every company in the world can say what they do…and many can tell you how they do it. But very few can clearly tell you why they do it. And that makes all the difference.

And one more time for good measure…

“People don’t buy What you do, they buy Why you do it.”  So, focus on the Why.

Watch Simon Sinek’s Ted Talk here…

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The Search for Social Media Insights

It may be time to recognize that data collected from social media will not so easily reveal its immediate impact on a company’s sales (as we’ve said before, it’s proven to be a bit slippery). But this doesn’t mean the baby should be thrown out with the bathwater. In finding ways to prove its value, social media marketers are changing the conversation away from a cause/effect relationship between a company’s marketing and its ROI to a deeper understanding of social data’s value. And as it turns out what it offers is way more valuable- the unprecedented parse-able social insights of a population.

In a recent post, we explained that the number one problem facing social media marketers today is tying social data to an increase in the bottom line (or the sales of a product or service). The challenge of “proof,” in turn, was making it harder to make a case for additional investment in social media marketing.

We said, “Demonstrating the value of the social programs within the company was, in fact, the top challenge noted (60%) by survey participants consisting of 600 media marketing professionals.”

 The State of Social Marketing 2015 report by Simply Measured states, “Companies of all sizes and maturity levels are struggling to prove the value of their social programs. Social media activities can be difficult to quantify, and marketers are trapped between readily available “vanity metrics,” such as Likes and followers, and difficult-to-measure objectives such as brand awareness.”

We went on to suggest that unless there’s a collapse of the capitalist system, better tools will surely arise to address the challenge. But we also noted, of equal, if not greater importance, would be the ongoing discovery of more creative and accurate ways to query the data.

As marketers hone in on methods to extract the gold nuggets of consumer intel out of the mountain of information, they’re hitting upon the true capital of social media- the most comprehensive picture of consumer behavior, sentiment and decision-making process they’ve ever been blessed to lay hands on. This might not be the smoking gun that ties directly to a sale, but, in fact, presents many more gifts in the long run as John Donnelly III, SVP of global sales and marketing at Crimson Hexagon, points out.    

 “One of the most effective ways to glean consumer insights is by analyzing social media conversation… sales teams are realizing that social media is rife with information about what their prospects care about, how they consume media and what motivates their decision-making,” said Donnelly.

Based on Donnelly’s presentation and other insights, here are some ideas to consider when taking the dive into social data.  

Get granular. Almost any question a marketer has regarding brand perception, market competition and the general sentiment of people discussing a product or brand can be found through social media analytics, so ask away.

Getting granular also let's marketers zero in on microsegments of the population that either are or can be Word-of-Mouth advocates for a brand or product.

Word of Mouth is the golden standard for all marketers. The ability to target Word-of-Mouth advocates on social media can be the difference between success and failure. Writing for convice&convert, Devon Wijesinghe discusses the importance of Word of Mouth and how it can be used.

“This rich source of information comes in handy when you’re looking to generate Word of Mouth about your brand. Tapping into the “right” market segments—segments whose interests and values are aligned with your brand—can be the catalyst your campaign needs,” Wijesinghe said.

Layer trending topics on top of a hyper-targeted market segment (both bits of information available through social media data analysis) and a marketer has made a happy marketing marriage.  

Focus groups may be passe according to some, but testing is still very much a part of the marketing strategy. From a product standpoint, social media insights can reflect the strengths and weaknesses of a product’s lifecycle as well as the effectiveness of current marketing efforts. Filling the role of the modern-day focus group, social media insights are also valuable for taking the temperature of the public on an idea such as a logo or slogan, a product or service. Testing the social media world’s tastes and perceptions allows for adjustment before launching, saving money and perhaps even preventing a catastrophic mistake.  

Social media data is virtually limitless (pun optional) and social media marketers are stepping up and learning how to use it best. We expect to be reading many more social media data “hacks” in the future. Stay tuned.

Visit smstudy.com for additional articles on sales and marketing. 

Sources:

"How to Sell Smarter Using Social Insights," Devon Wijesinghem http://www.convinceandconvert.com/social-media-measurement/social-insights/

"Supercharge Your Selling Strategy: The Power of Social Data," John Donnelly, https://inbound.org/discuss/john-donnelly-forget-the-focus-group-how-social-insights-can-help-you-sell-smarter-at-inbound15

The State of Social Marketing- 2015, Simply Measured, http://simplymeasured.com/#sm.0001gymsunkgqdcepli19xtqnlo4p

Corporate Strategy and its Relationship to Sales and Marketing

A company that hopes for a prosperous future must have a sound plan. In the world of Sales and Marketing this is called Corporate Strategy.

Corporate Strategy is the overall direction of the company, defined by senior management, that takes into consideration an assessment of the existing capabilities of the company and external opportunities and threats. It usually coincides with the immediate future fiscal period or it could be developed with a longer-term view, such as a three-year plan.

It is important to understand the overall Corporate Strategy and its relationship to sales and marketing. The Marketing Strategy works within the direction provided by the overall Corporate Strategy of the company and also interacts with other elements of the Corporate Strategy.

Corporate Strategy is a combination of the following:

• Senior Management Direction and Insights: This is provided by senior management based on their experiences and insights related to the business.
• Corporate Product Strategy: This defines the products or services the company offers and the research and development efforts required to create them.
• Corporate Marketing Strategy: This defines how the company will target, position, market and sell the planned products and defines metrics, targets and budgets for all marketing activities.
• Corporate Operations Strategy: This defines how the company will manage operational activities, manufacture its products and provide the corresponding customer support and warranty.
• Corporate Finance Strategy: This defines how the company will manage its finances, attain funding and financially sustain its operations. The Finance Strategy should include forecasts and projections and summarize costs, income and investments.
• Corporate Human Resource Strategy: This maps the human resource capabilities within the company and considers talent management and acquisition needs to sustain growth.

Here are the components of Corporate Strategy:

Typically, companies have existing documentation regarding their component strategies. These must be considered in an integrated manner to define a coherent Corporate Strategy. The level and complexity of documentation for these strategies may vary depending on the size of the company and the breadth of its product portfolio and geographic reach. If formal documentation of these strategies is not available—for instance, as with a start-up company—the teams involved in strategic planning should consider the various strategies and decide on an overall Corporate Strategy, which can then become a benchmark to execute future plans. The SMstudy® Guide framework is a great help in this endeavor.

Finalizing the company’s Corporate Strategy can be a time-consuming and rigorous exercise that requires inputs from multiple stakeholders, particularly senior management. It is advisable to execute strategic planning exercises at appropriate and specific time intervals, such as once or twice a year, and then finalize a Corporate Strategy on which senior management and the heads of strategy teams agree. Following this process will help to ensure that the leadership team has coherently defined goals and strategies that align with the overall strategic goals of the organization.

The Corporate Strategy can be divided into lower level strategies depending on the complexity of the organization. For example, the Corporate Strategy for an entire company can be divided into strategies for each business unit or geographic region such as country, state, or city, and then subdivided further into a Product or Brand Strategy for each product or brand in a business unit or geographic region. The Product or Brand Strategy is the lowest level in this hierarchy.

This illustrates the relationship between Corporate Strategy, Business Unit/Geographic Strategy and Product/Brand Strategy:

Corporate strategy is an umbrella under which many components of a company plan for future profitability. When that umbrella operates at full force, the forecast calls for raining money. 

Get the SMstudy, not Nuts

When creating a brand for your company do not use an American celebrity to shoot chocolate bars at innocent bystanders. Apparently Mars, the company who produces Snickers chocolate bars, did not get the memo.

In July of 2008, Snickers UK launched a commercial starring Mr. T, an American actor and one determined (and brave) speed walker. In the commercial, Mr. T crashes through a building, in what appears to be a supped-up pickup truck, and pulls up alongside a young man wearing tight yellow shorts. Mr. T proceeds to open fire with what appears to be a Gatling gun, pelts his victim with Snickers bar “bullets” and yells, “Speed walking?! I pity you fool. You a disgrace to the man race. It’s time to run like a real man.”

The commercial was pulled after just one week.  The Human Rights Campaign, the largest LGBT civil rights advocacy group, criticized Mars for spreading, “the notion that violence against LGBT people is not only acceptable, but humorous.”

Mars could have avoided this marketing failure by taking a look at Marketing Strategy, book 1 of the SMstudy Guide®. According to the book, “Brand perception refers to how prospective and current customers react to seeing or hearing about a company’s product or brand and how the company is perceived within the market. Leading organizations across industries realize that a powerful brand is one of their most important business assets, so they work hard to maintain a positive brand perception as it helps to increase sales and improve profitability.”

This was the second commercial in a three-part campaign entitled, “Get Some Nuts.” Mars had envisioned Mr. T as the face of the Snickers brand, but instead they were branded the company with the face of homophobia. Snickers could have avoided this issue by performing surveys as explained in Marketing Strategy. “Brand perception can be measured using a variety of approaches, but it is mainly measured via research surveys that question participants about the perceptions of the company and/or its products. Surveys typically gather quantitative and qualitative data. They are conducted to help companies understand how their brands are viewed in the market and to identify the brand attributes that are preferred by customers.”

The intention of the “Get Some Nuts” campaign was to target men and their masculinity. In order to be a real man you need to be tough and aggressive like our good ole pal Mr. T. Mars could have avoided yet another blunder by sticking to Marketing Strategy. As stated in the book, “Once a company has identified all market segments, explored the competition, and then compiled the details of competitive products, it should then analyze the various segments and the strengths, weaknesses, opportunities, and threats faced by the company in order to identify the target segments in which the business would be most competitive. This process involves identifying the type of customers a company plans to target and the product categories under which it intends to create products.”

In this case, the campaign did not just humiliate homosexual men, which makes up 1.8 percent of the male population, but also men perceived to be “wimpy”. The campaign only targeted men that are rugged and tough, which does not help a company when it comes to forming target segments.

Companies can benefit from providing their employees with the knowledge that can be found in the SMstudy Guide®. If only Mars had been aware of what a Sales and Marketing certification can do for its company, they may have eluded a very big marketing fail.

For more information and resources about Sales and Marketing visit SMstudy.com.

Innovative Internet-Enabled Business Models

In this digital age, businesses that fail to operate online risk going offline for good.

The growing popularity of smartphones, tablets and digital media provides opportunities for a company not only to use fragmented new-age marketing effectively to promote existing products, but also to come up with innovative business models where product demo, customer acquisition and order fulfillment can take place online.

Innovative business models might include the following:

Online Marketplaces—Several e-commerce companies have created global online marketplaces for selling books, consumer goods and other products. In such business models, customer acquisition is usually initiated through the company’s website. The company coordinates with its multiple suppliers to source products; samples, demos and product reviews are provided on the website; customers make their purchases online; and items are shipped directly to customers.

Here is an example of Online Marketplaces:

• Book publishing and retail businesses, which historically gained much success using traditional business models, have been significantly affected by the advent of online marketplaces such as Amazon, eBay, Alibaba and Flipkart.

Online Services—Online services have significantly impacted many traditional product and service industries by transforming existing business models and creating new ways to conduct business.

Here are examples of Online Services:

• Global Positioning Systems (GPS) and online maps have made physical maps redundant.
• Online learning tools have gained popularity and, at times, can complement or even replace physical classroom training.

Online Networking—The Internet has made the world a smaller place. People can now access their networks at all times. These changes have significantly impacted the way in which people communicate with each other and, in turn, have created new possibilities for innovative business models.

Here is an example of Online Networking:

• Social media channels such as LinkedIn, Twitter, WhatsApp, Facebook and Google+ have significantly changed the way in which people communicate with each other.

Business Models Using Smartphones and Tablets—Smartphones and tablets are Internet-enabled devices that allow people to have an ongoing connection to the Internet. Since individuals usually carry their smartphones and tablets with them, mobile apps are becoming increasingly popular. Innovative business models based on the use of mobile devices can disrupt several existing business models—more so in industries that rely on other forms of communications and networking. 

Here are examples of Business Models Using Smartphones and Tablets:

• Social media channels such as Instagram, Twitter, Facebook and LinkedIn provide mobile apps that enable users to easily share photos and updates or chat with friends.
• Some mobile apps allow users to locate nearby restaurants, read reviews and also post reviews about their experiences.

In terms of business, the popularity of the Internet has fueled the “adapt or die” landscape more than ever. Business models that integrate online marketplaces, online services and online networking, and that allow for compatibility with smartphones and tablets, offer businesses excellent opportunities for sustained success.

The Millennial Impact

Snapchat, the quick and fleeting photo messaging application, has become increasingly alluring for companies wanting to dip their toes in the “Ephemeral Marketing” waters.  Truthfully, the app had a rocky start entering the digital marketing world, but companies such as McDonald and Chat Sports have now mastered the art.

Snapchat launched in 2012 and currently has 50 million users sending more than 400 million picture or video messages (“Snaps”) per day. That is 46 snaps a second. It’s no wonder companies and marketers want to utilize the app!

Snapchat has several features that are useful in marketing a brand or product. You can send pictures or videos to your followers, but the media will only be visible for up to 10 seconds and then it will disappear, as per Snapchat rules. So, the trick is to use the medium effectively considering the time constraints. Companies have also found the story feature to be very convenient, even if it may sometimes require a workaround. Since users can post snaps to their story, but only users that follow a company can actually see the company’s story, social media strategists put on their thinking caps.

One example of social media “assistance” was used by the American fast-food restaurant McDonalds. McDonalds wanted to employ Snapchat to promote a new product, but they had yet to expand their follower base. The company turned to Twitter, another social media platform, to release a photo from their Snapchat account with the words “stay tuned” written in French fries. This generated a curiosity that in turn built their user base. McDonalds then snapped several pictures on their Snapchat story to ensure their product was seen by all of their followers.

Another example comes from Chat Sports. Chat Sports took a different route in order to grow their following.  The company sent a snap to their followers announcing the opportunity to win free baseball tickets if they could get five of their friends to add “ChatSports” on the app. This expanded their base and also provided the company with the capability to reach their target audience.

There are several other ways for companies to market their brand or product on the app. The NBL snapped behind the scenes videos to promote  games. Taco Bell and GrubHub used the app to send snaps with discount offers. But you better be quick if you want to grap the offer; customer only has ten second to take a screenshot of the coupon before it disappears. Companies have even promoted their live events by urging users to send videos of their experience and send it to the company for free tickets.

As stated in Marketing Strategy, book 1 in the SMstudy Guide®, “It is a fact that people now spend more time on the Internet, via smartphones, tablets, or computers, than they spend on conventional mass media, such as television, radio, or newspapers. This is especially true for the thirty-year-old and younger market segment. Since sales and marketing is most successful when it meets the demands of consumers, this change in consumer preferences is significantly altering the sales and marketing landscape for established companies. Businesses are discovering that conventional mass media marketing has limited effectiveness and some customer segments are not even reachable using these traditional media forms. “

A study done by re/code gets to another reason why companies are so keen on Snapchat. Out of the 50 million Snapchat users, 84 percent are Millennials. If Millennials are your target,  then where else would you want to be! Contrary to popular belief, this doesn’t mean that Millennials have a short attention span, it’s that the attention that is given needs to be quick and genuine which is exactly what Ephemeral Marking promotes. 

How Low Can You Go? How High Can You Get?

Continually rising prices at the gas pump since the mid-1970s has had us all asking, “How high can these get?!” As 2015 slipped into 2016, with oil by the barrel in free fall, we found ourselves asking, “How low can this go?”

The roller coaster of oil pricing per barrel and sticker surprise at the gas pump has a lot of people wondering, “How in the world do they set those prices?”

Companies set their prices according to their own pricing strategy, which “properly prices products or services so that the company can sustain profitability while maintaining or growing its market share,” according to SMstudy’s Marketing Strategy, book one in the SMstudy® Guide series. Even though it sometimes seems as though companies are grabbing for quick profits and letting the future take care of itself, sustained profitability and growth in market share are part of every sane strategy.

Coming up with that sane strategy isn’t as easy as a few fat cats sitting around in a smoky room saying, “Well, what do we want to charge for this?” That question is likely to be followed with another, “What CAN we get for this?” And now our fat cats are talking strategy. The SMstudy® Guide says, “In order to develop a comprehensive Pricing Strategy, a company must specifically evaluate and understand the trends and dynamics in many areas such as the following:

• the features and pricing of competitive products in the market
• the company’s desired positioning, mapped against that of the competition to identify pricing of similarly positioned products
• the consumer mindset to understand the demand and spending capability for each product
• the cost, projected unit sales, and targeted profitability levels of each product
• the innovativeness of each product
• the capability of the production and operations teams to create high-quality products at reasonable costs
• the knowledge of the current and desired market shares for each product.”

 The SMstudy® Guide details nine inputs and fourteen tools companies can use to understand these trends and dynamics to design a successful pricing strategy. One input is the company’s own positioning statement. This statement is important because “how a company markets a product impacts who buys it and how much consumers are willing to pay to purchase it.” The positioning statement identifies who the company wants to sell to and how much it would like those customers to pay. “A company that caters to a wealthier market segment with relatively high disposable incomes, aims to create a premier positioning for the product focusing on the quality of the goods or services, brand messaging, and packaging.” This market position allows for premium pricing, too.  It is no wonder that there are at least three grades of gasoline at every pump.

Another input is “opportunities and threats.” As the SMstudy® Guide points out, “Identifying and analyzing opportunities and threats help the company consider the external factors that may influence the costs involved in manufacturing a product or service and subsequently impact its pricing.” This is why refinery fires, hostile take overs of oil fields, and sudden growth from emerging markets all over the world affect the price of gasoline at the station on the corner.

So, how in the world do they set those prices? By following a rather elaborate pricing strategy.

For more help understanding pricing and marketing strategies, visit SMstudy.com/articles

The information in this article comes from chapter four of SMstudy’s Marketing Strategy, book one in the SMstudy® Guideseries of six books that also include Marketing Research, Digital Marketing, Corporate Sales, Retail Sales and Branding and Advertising.