Unilever sold consumer products in 150 countries. As much as 85 percent of their profits came from overseas, with 7 percent of their profits being attributed to Asia and the Pacific. Unilever attempted to break into the Japanese detergent market with Surf Superconcentrate. It achieved 14.5 percent of the market share initially during test marketing, which fell down to a shocking 2.8 percent when the product was introduced nationally. Where did they go wrong? Surf was designed to have a distinctive premeasured packet as in tea-bag-like sachets, joined in pairs because convenience was an important attribute to Japanese consumers. It also had a “fresh smell” appeal. However,Japanese consumers noticed that the detergents did not dissolve in the wash, partly because of weathe~ conditions and also because of the popularity of low-agitation washing machines. Surf was not designed to work in the new washing machines. Unilever also found that the “fresh smeU” positioning of new Surf had little relevance because most coosumers hung their wash out in the fresh air. The research approach was certainly not without flaw as Unilever failed to identify critical attributes that are relevant in the Japanese detergent market. Furthermore, it identified factors such as “fresh smeU” that had no relevance in the Japanese context. Appropriate qualitative research such as focus groups and depth interviews across samples from the target market could have revealed the correct characteristics or factors leading to a suitable research design.
Despite weak performance in the Japanese market, Surf continued to perform well in several markets including India through 2009. Surf. launched in 1952, is the third-biggest-selling product in the washing detergent market behind Unilever’s Persil and Procter & Gamble’s Ariel.
Ethics in Marketing Research
Ethical issues arise if the process of defining the problem and developing an approach is compromised by the personal agendas of the client (OM) or the researcher. This process is adversely affected when the DM has hidden objectives such as gaining a promotion or justifying a decision that has been already made. ‘The DM has the obligation to be candid and disclose to the researcher all the relevant information that will enable a proper definition of the marketing research problem. Likewise, the researcher is ethically bound to define the problem so as to further the best interests of the client, rather than the interests of the research fum. At times this may mean making the inter; tests of the research fum subservient to those of the client,leading to an ethical dilemma
Ethical or More Profitable?
A marketing research firm is hired by a major consumer electronics company (e.g., Philips) to conduct a large-scale segmentation study with the objective of improving market share. The researcher, after following the process outlined in this chapter, determines that the problem is not market segmentation but distribution. The company appears to be lacking an effective distribution system, which is limiting market share. However, the distribution problem requires a much simpler approach that will greatly reduce the cost of the project and the research rum’s profits. What should the researcher do? Should the research firm conduct the research the client wants rather than the research the client needs? Ethical guidelines indicate that the research firm has an obligation to disclose the actual problem to the client. If, after the distribution problem has been discussed, the client still desires the segmentation research, the research firm should feel free to conduct the study. The reason is that the researcher cannot know for certain the motivations underlying the client’s behavior
Such ethical situations would be satisfactorily resolved if both the client and the researcher adhered to the seven Cs: communication, cooperation, confidence, candor, closeness, continuity, and creativity, as discussed earlier. This would lead to a relationship of mutual trust that would check any unethical tendencies
Kellogg’s From Slumping to Thumping
Kellogg’s is the world’s leading producer of cereal and a leading producer of convenience foods. including cookies, crackers, toaster pastries, cereal bars, frozen waffles, meat alternatives, pie crusts, and cones, with 2007 annual sales of SII.776 billion and a market share of more than 30 percent. David Mackay, chairman and CEO of Kellogg’s, takes pride in being a part of the Kellogg Company because of the consistency of the decisions that are made- within the company to promote the long-term growth of their business as well as serve the needs of their people and communities.
With such a large share of the market, one would think that Kellogg’s is untouchable. However, Kellogg’s faced a slump in the market. Its cereal sales were declining and it had to face the challenge of getting out of its slump. Kellogg’s therefore turned to marketing research to identify the problem and develop several solutions to increase cereal sales
The Marketing ResearchDecision
1. What is the management decision problem facing Kellogg’s?
2. Define an appropriate marketing research problem that Kellogg’s needs to address.
3. Discuss the role of the type of marketing research problem you have identified in enabling David
Mackay to increase the sales of Kellogg’s.
The Marketing Management Decision
1. David Mackay is wondering what changes Kellogg’s should make to increase market share. What marketing strategies should be formulated?
2. Discuss how the marketing management decision action that you recommend to David Mackay is influenced by the research that you suggested earlier and by the findings of that research.
In defining the problem and developing an approach, the researcher can use Decision Time and What If? software distributed by SPSS. Forecasts of industry and company sales, and other relevant variables, can be aided by the use of Decision Time. Once the data are loaded into Decision Time,the program’s interactive wizard asks you three simple questions. Based on the answers, Decision Time selects the best forecasting method and creates a forecast.Forecasts and what-if analyses can help the researcher to isolate the underlying causes, identify the relevant variables that should be investigated, and formulate appropriate research questions and hypotheses
Defining the marketing research problem is the most important step in a research project. It is a difficult step, because frequently management has not determined the actual problem or has only a vague notion about it. The researcher’s role is to help management identify and isolate the problem. Figure 2.5 is a concept map for problem definition
The tasks involved in formulating the marketing research problem include discussions with management, including the key decision makers, interviews with industry experts. analysis of secondary data, and qualitative research
Analysis of the environmental context should assist in the identification of the management decision problem.