Points of View: Gut in the time of Big Data?

In what is termed the 'Era of Big Data', where does the role of formal research end, to give way to more unscientific methods of tapping the pulse of the market and consumer? afaqs! explores.

Is it risky to launch a new product in the market without doing any formal insight mining or consumer research first? Will marketers do well to reduce their reliance on structured research techniques? These questions represent the tip of the proverbial iceberg; beneath the surface lurk several similar questions posed by our readers in response to a recent story on afaqs!. The story was about a leading food & beverage brand that went on record claiming the absence of any formal research before launching a new product in the market recently.

In any 'research versus instinct' debate, most experts tend to take the safe middle path, something statisticians refer to as the 'Error of Central Tendency'. It's the same fallacy that makes people gravitate towards option number three on a zero-to-five response scale, known as the Likert Scale. So, we asked our experts a different question. Is formal, traditional research dead? If not, then at what point does the role of gut instinct or intuition begin?

Ultimately, a person's 'instinct' is nothing but a recycled amalgamation of his/her past experiences and facts, thus making it a weapon that only senior or more 'experienced' professionals possess. What exactly does the term 'marketer's intuition' imply, then?

afaqs! spoke to some brand marketers and research experts to find out. Excerpts.

Sandipan Ghosh, associate vice-president, marketing, consumer brands division, Ruchi Soya

Traditionally, research includes conducting 'need scope', after which you go backwards and see how your product can cater to that need. Another way of looking at it is from the perspective of the company. Say, I have a product that can cater to some need in the market. Then, I do traditional research to see if the product has any demand. So, research can be outward or inward-driven.

Most of the bigger companies that have a formal set up tend to do formal research. That's where traditional research is alive and will continue to be. So, in that sense, research is not dead. But then there are these 'entrepreneur brands' such as Parle, MTR Foods or even Nutrela that also invest in research but conduct what I call 'commonsense marketing'.

Our insights are lying in our homes and backyards. We spend time with our families, step out and interact with pedestrians, visit shops on the way to office, meet people of diverse backgrounds in office... there is more than enough substance right there. If you look at all the insights available in your backyard, no more research is warranted. So, in that sense, symbolically, research is dead.

Jehil Thakkar, head, media and entertainment, KPMG

We are moving into an era where research will be indispensable in most cases. If you've been in a particular industry for a long time and know your market and your consumer extremely well, then obviously research has a little less value than it otherwise would. However, when the stakes are high, research can add another dimension to, validate or invalidate any gut feeling that people may have. So while experience and gut will play a part, I think all decision making is moving towards 'Big Data'. We're moving towards a more data-driven area than we were in before.

In fact, research can continue to be an integral part of a product that has been around for five or ten years. Research can help you ensure your product remains relevant, that it is in the right market, that it is positioned correctly and that your communication is correct.

'Marketer's intuition' is nothing but experience and observation gathered through data. Intuition is formed by years of being fed by research. It is because you have a certain piece of intuition that you commission research in the first place -- to validate or invalidate that intuition.

Nikhil Rungta, ‎chief business officer, Yebhi.com

For me, research is not dead; rather, it is evolving. Research is becoming more 'real time'. I, as a marker, can know about my just-launched product or marketing campaign by gauging what people are saying about it on the internet. Insights like 'more search queries' and 'more videos watched' help understand consumer reaction to a particular launch.

We use research more for validation than for hypothesis. We lay out a plan of what we want and decide whether research can give us the answer. We are not big fans of 150-page reports and thus specifically look for the top five things a research study can indicate, following which we take a call about whether or not to implement a particular strategy. So, the outcome of research is always a mix of gut and facts. It is all about validity and better decisions.

That is why, behavioural research or ethnography is gradually catching up among brands these days. It is like Bigg Boss where there are 84 cameras watching a person and he or she can't fake it for long. Similarly, marketers need to spend time with their consumers to understand their psyche and design and market a product according to their tastes and preferences. So, research in the coming years will be more like analytics where there are fast results which can help marketers take better decisions.

Rinku Patnaik, executive director and head, qualitative division, Ipsos India

I won't say traditional research is dead but there are better ways to connect and understand the consumer. Consumers have evolved as people; the way they lead their lives and how they are influenced have changed. It is important to understand the context of behaviour as the consumer, at different points in time, is getting influenced, either directly or indirectly. It is critical to understand the situation 'in context'. So you compliment traditional research with other ways (such as meeting them online, asking them to capture different moments of their day/life) and use that to understand their behaviour. Ipsos conducts a lot of observation-based research; it helps in understanding the consumer better.

Gut will come into play only when you know your consumer well. There exist marketers who do not research their ads and go by their gut -- and it has worked for them. But some marketers play safe; given the investment that is involved in a new product launch, it's best to do consumer research. Unless, of course, you have an understanding of the consumer and though you may not have done specific research for that particular purpose, you take a call based on intuition and years of knowing the target group.

Paritosh Joshi, consultant to media firms and member, technical committee, BARC

Research is not dead by any means. In fact, it is rapidly growing. Areas that were hitherto considered outside the realm of quantitative research are now being considered a part of it (for example, moods and emotional states). Saying you don't need formal research is a primitive, juvenile outlook. I would dismiss this view. It offends me. How would marketers work on their media plans and measure the reach of their campaigns, if things like audience studies, TV ratings and comScore didn't exist? I am very much pro-research and consumer insights.

There are many studies that get dismissed for being bent. So of course, you can commission any study -- even scientific studies, not just market research -- to be bent. If you decide to be bent about what you're doing then you can make the research produce the results that you want it to produce. But that is not sufficient ground for us to dismiss the entire body of knowledge called 'consumer research'. That would be a very broad comment about something very specific. Today, is a lot of research being done in a poorly structured way? Yes, no doubt. But, that's not the fault of the science; that's the fault of the user of the science. And the problem with corporate use of consumer research is that it can never be critiqued or reviewed properly.

As for 'gut feeling', it is not something everybody has the right to claim. It will take extraordinary, rare genius to seriously take decisions based on 'gut feel'. Instinct is the ability of the mind to make leaps after having years of discipline, training and knowledge. So you can arrive at great insights but only from a platform of solid knowledge. Even to arrive at unorthodox solutions, you have to go through the grind of asking all the basic questions. Basing decisions on one's gut feel alone is irresponsible marketing, because the job of a marketer is to reduce, not increase, the risks in a business.

(As told to Ashwini Gangal, Satrajit Sen and Raushni Bhagia)