Market Research Is Not Marketing Research

Chapter of the "MARKETING, FASTS & SLOW"

Don’t call it market research.

At least 80% of professionals in market research don’t have an education in marketing. They are psychologists, sociologists and many other related fields. It’s a rare exception that they have a specialization in marketing nor being scientific about marketing (PhD) nor have a proper managerial background in marketing.

The market research industry is rooted in “opinion research”. What you learn in courses on market research, is actually “opinion research”. That might be in demand for journalists, but marketeers are better off not to look at opinions, but research what are drivers of consumer behavior. And this can NOT be done by researching opinions.

It’s hard to do research for marketing right if you do not have the full picture. To make clear what I am talking about:

Don’t call it market research. Call it “Marketing Research”.

Marketing Research’s aim is to provide clarity, to unpack the insights needed for crafting powerful marketing strategies and tactics.

Many professionals even misunderstand the term “Marketing”. They confuse it with advertising, design or communication. Let’s look at the definitions of some great minds:

Peter Drucker: “The aim of marketing is to know and understand the customer so well that the product or service fits them and sells itself.”

Philip Kotler “Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.”

Byron Sharp “Marketing’s job is to increase mental and physical availability to drive brand growth.”

It comes back to the famous 4Ps “Marketing is creating the right offering, at the right price, in the right place, with the right message for the right people.”

The fundamentals of marketing research are a proper understanding of how and why customers buy. This understanding has shifted in the recent decades with the advent of neuroscience.

Here are the beliefs in traditional marketing that influence how market research is carried out:

Misbelief#1: Benefits convince the customers mind to make the final buy decision

The truth instead is this:

The rational mind does not decide anything, at best it consults. Decisions are a subconscious final impulse. Neuroscience can predict decisions often seconds before the person “thinks he decides”.

Instead, the process goes over three plus one stage: perception, intuition and emotion, optionally moderated by thinking. This means the rational convincing using benefits and argumentation is an optional additional tactic – that however can heavily backfire.

Purchase intention is not a prebuild opinion or intention. It is built in the moment of purchase every time anew. It considers everything, the product, situation, and context. Measuring purchase intention can only be a useful approximator of future behavior if this moment, the product, the context and the situation is well enough simulated.

Subconsciousness determines and primes conscious thinking and ultimately buying – “think 90%”. This means in Marketing Research we should try to measure this subconscious associations.

Emotions are indicators on how customers assess a brand and ads and any other stimuli. Creating positive emotions are an indicator that your advertising will likely be stored as means to stimulate actions while negative emotion stimulates the contrary – to avoid new actions. It’s hard to change behavior with negative emotions.

The emotional brain is seeking novelty and security at the same time. Novel information may spark attention but if they miss a certain degree of familiarity, they will not turn into intention to act. Be MAYA - Most Advanced Yet Acceptable.

Purely knowing a brand visually creates a sense of familiarity and felt security. That is one of the first findings of Neuroscience from the 1960s called “Mere Exposures”. It has been proven -over and over- again. Simply nurturing memory structures of a brand of any kind is building a brand – just because it makes customers feel the brand to be a safe choice.

For Marketing Research this means that we need to track subconscious mental memory structures beyond awareness.

Misbelief#2: The more benefits the better

Our rational paradigm implicitly makes us believe that good arguments add up like value that stacks up. While this is not wrong per se it totally ignores how information is processed in our brain. System 1 starts with one holistic assessment then optionally System 2 performs a one by one analysis of each benefit and plays this back to the subconscious regions for judgement.

Neuroscience found the overall rule of “fluency”. The harder it is to process a stimulus the less it will be properly processed. Stimuli are hard to process if they are novel and if they are many. As Kahneman once put it: The brain wants to think is like a cat wants to swim. Cats can swim but avoid it at all costs.

Customers need to have very high motivation to see them pay these costs. The default rule: Don’t make customers think. Convince them with things they already know. Be a brand that is easy to buy.

For Marketing Research this means that we should not rely on methods like Conjoint Measurement that erroneously belief features simply add up.

In the same sense humans do not perform a value price tradeoff. They may form a price expectation using their intuitive intelligence and compare that with the actual price. If there is a mismatch they may engage in rational thinking and post-rationalizing, which however is mostly a self-talk between wanting a product and wanting to keep financial resources for something else. This tradeoff, however

• Trades a holistic value assessment with a sacrifice

• The perceived value can change through situation and context

• As well as the sacrifice changes through situation and context as well.

That is why products and prices need to be tested in holistic settings not artificially dissected into features.

Misbelief#3: No attention, no impact.

Attention, Interest, Desire, Action (AIDI) is the mantra of 20^th century marketing. It turns out that at very best it is just one half of the truth.

Neuroscience showed that attention is only needed for advertising that wants to activate short-term actions or make customers learn a rational information. Above we learned that both can not be the sole intention of brand communication. Attention may even backfire as it sparks critical thinking and brings up objection self-talk.

Building mental memory (=branding) does not require awareness nor is this even useful. This includes building associations of the brand with category entry points.

For Marketing Research this means we need to track branding traces in the subconscious. It also means that we need to change the common practice of only surveying customers that are aware of a brand.

This misguided practice also dismisses half of the market. The market of light buyers that make of typically 50% of volume in any market according to Ehrenberg Bass Institute research.

Misbelief#4: Trick customers to buy by exploiting irrationalities of customers.

If you have to choose between two alternatives (say, two cities) and you recognize (i.e. have heard of) one but not the other, then choose the one you recognize. At first glance, that seems “ignorant” or “irrational” (you’re basing your decision on sheer recognition, not careful calculation). But Intuition researcher Gigerenzer shows that in many real-world environments this rule predicts well - recognition correlates with the criterion (e.g. larger/higher/popularity)- and thus the heuristic can be ecologically rational.

For example, in studies about city populations, people asked to choose which of two cities is larger will often pick the city they recognize. That strategy often performs as well as, or better than, more complex decision methods.

• When doctors are given information about a medical test in probabilities, they often appear to make irrational mistakes.
  Example: “The test has a 1% false positive rate, the prevalence of the disease is 0.1%, and the test is 100% sensitive. If the test is positive, what is the chance the patient actually has the disease?”
  Many answer around 70–80%, which is mathematically wrong (the correct answer is closer to 9%).

• But if you reframe the same problem in natural frequencies (counts instead of probabilities), people solve it quickly and correctly:

“Out of 1,000 people, 1 will have the disease. The test will detect that 1 case. But about 10 others will get a false positive. So in total 11 people test positive, and only 1 truly has the disease.”
→ Most people instantly see the answer is about 1 in 11 ≈ 9%.

Here the supposedly “irrational” intuition in probability problems is not stupidity — it’s because the information was presented in a way that is unnatural for human cognition. When reframed in frequencies, intuition is mathematically smart and ecologically rational.

This example is central in Gigerenzer’s argument: what looks irrational under classical probability norms is actually a mismatch of representation, not a flaw in human reasoning.

In many countries, people are asked if they want to donate their organs after they die. You might think everyone makes this decision by carefully thinking about it. But that’s not what happens.

Here’s the trick: it depends on what the form already says by default.

• In Germany or the UK, the form says: “You are not a donor, unless you tick the box.” Most people never tick it. So only a small number of people become donors.

• In Austria or Spain, the form says: “You are a donor, unless you tick the box to say no.” Most people never untick it. So almost everyone becomes a donor.

The difference is huge: fewer than 20 out of 100 people in opt-in countries are donors, but more than 90 out of 100 in opt-out countries.

At first, this looks “irrational.” People aren’t really deciding — they are just going along with whatever is already set. But this is not stupid. It is actually a smart shortcut. It saves effort, it feels safe, and it usually works well because most people trust that the default was chosen for a good reason.

So what looks like laziness or passivity is, in fact, ecologically rational: in the real world, sticking with the default often leads to good outcomes, like saving thousands of lives through organ donation.

Real world is not a lab experiment where all context is set and known. The opposite, real world situations are that complex that it actually would be mostly irrational to solve rationally.

Behavioral “Science” tells us how we can exploit human irrationalities and trick customers into buying stuff. Beware of this bad science. It originates from an outdated mindset. The belief that good decision making is rational and everything else is irrational – a nice word for “stupid”. It is advised to stop this arrogance.

Leading researchers studying intuitive intelligence like Gerd Gigerenzer comes to a very different conclusion. He concludes that the opposite of rational is eco-rational thinking. Our intuitive brain always performs a thinking process that sees the situation under uncertainty and unknown confounders. In lab experiments behavioral scientists construct artificial situation that in this way never happen in reality. In these situations the intuitive mind might perform outcomes not aligned to rational outcomes but only because the assumption of certainty is never met in real life.

Consequently, behavioral scientists find dozens of “human biases” that one should use to trick customers into buying. The reality is that they barely work. Customers are smarter than we think. In German, we call it “Bauernschläue” – it translate as “Farmers Shrewdness”.

David Ogilvy once said: “The consumer isn’t a moron; she is your wife.”

Better to expect customers to smell any attempt to persuade or seduce them at their expense. The intuition is hard to trick – it’s a mental immune system. It is possible to prime to initiate unconsciously held goals. But it is close to impossible to generate goals that the customer did not had in the first place.

Persuasion tactics typically only work if customers do not care about the outcome itself. If it comes with an important sacrifice, it becomes very hard.

For Marketing Research this means to start with a mindset of respect to the intelligence of customers – that as of today is not yet fully understood.

Don’t trick them. Respect customers eco-rational nature and stop your implicit arrogance of seeing her or him as “a stupid victim that just needs to be exploited”.

p.s. More on how to do Marketing Research right in my upcoming book. Also you can reserve a seat in our onsite Masterclass https://masterclass.supra.consulting