Marketing research and theory

 

I was inspired by the article (or open letter) written by Terry H. Grapentine and R. Kenneth Teas entitled “From Information to Theory: it’s time for a new definition of marketing research” which appears on the AMA’s website, marketingpower.com (accessed October 2012)

The authors debate the importance of theory in marketing research and urge for the rightful place of “theory” and the “creation of knowledge” in the American Marketing Association’s definition of marketing research. 
 
They propose a new definition of marketing research to read as follows (and adds the words “theory” and “to create knowledge” which currently do not appear in the definition):
 
“The primary goal of marketing research is to develop and test theories that seek to explain and predict marketing phenomena with the view of using this understanding to improve business decision-making. In this capacity, marketing research is the function that links the consumer, customer and public to the marketer through this understanding. It creates knowledge used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the knowledge required to address these issues, designs the method for collecting appropriate information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.”  I bet its been a while since you read this definition!
 
I could not be in more agreement with their argument. I have always thought that marketing research, at least as practiced by most commercial researchers, seriously lack the necessary understanding, acknowledgment and incorporation of marketing theory. 
 
Marketing theory is the fundamental building block of marketing, just as other disciplines such as science is built upon theories of physics (think of the contributions by Newton and Einstein). Theory is built upon one or more hypotheses, and over time theory is proven or disproven. Over time, proven theories become the law of the land by which we all knowingly or unknowingly abide and which eliminates the need to reinvent the wheel. Over time theories evolve but they never disappear. Theories facilitate the creation of knowledge which lasts long beyond the creation of information. Which makes me think – in marketing research, do we only create information with no emphases on the creation of long lasting knowledge?
 
By applying theory we get to define more meaningful research objectives, get a reasoning behind our research findings, and it drives us when making interpretations, predictions, and ultimately important decisions. 
 
When we acknowledge the importance of theory, we won’t necessarily strive to create new theory, but rather to confirm or disconfirm some phenomena’s presence in our data. However, I believe the benefit in theory goes beyond an understanding of our data and an understanding of what our respondents are trying to tell us. Theory also can lead us in our approach to respondents. In our research design and execution of both qualitative and quantitative data collection. 
 
As a start, I see great benefit in applying the following theories in marketing research. I won’t go into a detailed explanation (or debate) here as much has been written about these theories elsewhere. 
 
1. The Theory of Halo (the Halo-Effect or Halo-Error) termed in 1920 by psychologist Edward Thorndike, teaches us that the cognitive bias in our judgments are affected by our overall perception of something important to us. The evaluation (e.g. on a rating scale) of a particular attribute will be a product of the respondents’ overall impression (or most recent experience) with the brand, rather than an objective evaluation of the specific attribute being evaluated. A recent bad (or good) experience with a brand can affect the respondent’s evaluation of all facets of the brand and wipe out everything good (or bad) the brand has done to them over a long period of time. Related to questionnaire design: a sensitive issue early in the survey can significantly affect the evaluations expressed by the respondent for the rest of the survey. A survey with a boring or poorly written introduction could affect the cognitive effort due to a lack of motivation. Other sources of the halo-effect include the effect of other attributes, peer pressure, brand familiarity and brand popularity. A partial remedy could be to introduce covariates (or “blocking variables”) in our analysis that would allow us to control for these halo affects provided we have them measured in our survey, such as a measurement of the “level of brand familiarity”, or “perceived popularity among friends”. Yes I know the concept of halo effects is nothing new to researchers but I am demonstrating how some theories have guided us over many years.
 
2. The Gratitude Theory states that the expression of gratitude creates feelings of happiness. By understanding the key ingredients of gratitude with different products and brands, we can lead consumers in better expressing their gratitude to others, e.g. via social media, which will lead to higher levels of customer satisfaction (happiness). In many religions this theory has been at work for ages. Followers are encouraged to express gratitude towards others which has been found to effect their satisfaction with life.
 
3. The Prospect Theory (Kahneman and Tversky (1979)) is very applicable in designing choice models as it implies that the “disutility of a loss exceeds the utility from a comparatively sized gain, and that differences, contrast, or changes are more salient than absolute values” (Source: AMA’s marketingpower.com).  
 
4. The Framing Theory and the concept of framing bias have guided researchers to some extent (e.g. to design questionnaires that limit order-bias) but this theory has new meaning and applications in digital and social media research. 
 
The number and variety of theories which can guide us to better research designs, questionnaire construction, analysis, and interpretation of findings is almost infinite. In a follow-up post I will explore a few more marketing theories. We have to start by recognising the inclusion of theory and creation of knowledge in the definition of marketing research. Next step is to let theory guide us in our everyday’s work!

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Further Reading:
Terry H. Grapentine and R. Kenneth Teas entitled “From Information to Theory: it’s time for a new definition of marketing research” (accessed October 2012).
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