Media, A Wharton Professor and Marketing Research - II
And a little book called Moneyball
Following up from my last post, I gave my second blog a little time to think itself through. For some reason, I kept thinking about this book while I was listening to Professor Fader's ideas. That set me off on another line of thought. What is marketing research all about? The professor kept talking about the value of conventional wisdom and using information more effectively. Perhaps a few innovators in baseball have hit upon the answer. So, without much further ado, let me introduce the reader to the book using the omnipresent Wikipedia (http://en.wikipedia.org/wiki/index.html?curid=438445). Here you can find a pretty succinct summary of the book. The core of the book to me, however, is the essence of innovative marketing research.
Every industry has its own conventional wisdom. Take, for instance, the motion picture industry. Traditional wisdom says that movies should be released on Fridays so that they can benefit from the weekend crowd. While this might have held true in times when the average movie-goer went to work 5 days a week and looked for some Friday night entertainment, but will this theory change if we had flexible working hours? Is the pre-release on Wednesdays and Thursdays an attempt to get an early edge? Is it the reflection of an extended weekend? Do these rules apply equally in the summer? I don't have a definitive answer, but I just know that the new trend certainly isn't conventional wisdom.
Baseball, too, suffers from its multitude of opinions. What Billy Beane and his crew did was to challenge opinions using statistically-backed stats. For example, they found that a college player's chance of making it in the big leagues is way greater than a high school player's odds. This flies in the face of traditional baseball thinking - but is validated by research! This allowed a middle of the pack team like the A's (when it came to budget) to run with organizations like the cash-rich Yankees or the Red Sox who in the past have simply shelled out exorbitant cash for the best established players.
I am sure marketing researchers at this point are smiling to themselves. Haven't we all faced some brand manager who seems to believe that her brand is premium despite all evidence to the contrary? Or that TV advertising still generates 15% incremental sales for a mature CPG product?
To me, the professor's theories, the book and the current state of marketing research all point in the same direction. Research is useless if it is only used to validate conventional wisdom. True value in research is driven by finding previously undiscovered nuggets - and not by doing the tried and tested.