1 INTRODUCTION

M
arketing decisions come in all shapes and sizes. Actions can be strategic or tactical
and relate to different elements of the marketing program—from a new product
launch to a price change. Some decisions work out, others don’t.
In the history of marketing, probably no marketing decision has been as widely discussed and
criticized as Coca-Cola Company’s launch of New Coke on April 23, 1985, replacing the
original Coca-Cola, with its classic taste and a history going back to 1886.

The New Coke decision was not made without market research. The campaign
that PepsiCo built around the “Pepsi Challenge,” with its taste tests beating out
Coca-Cola, had sparked the development of a new formulation to beat Pepsi on
taste. Coca-Cola had conducted numerous taste tests pitting Coca-Cola and New
Coke against Pepsi. When New Coke was launched and the original Coca-Cola
withdrawn from the market, the outcry from consumers was immediate—and
unprecedented. It grew to a point that by July 11, 1985, the company announced
that classic Coca-Cola was back. Company president Donald Keough stated, “The
simple fact is that all the time and money and skill poured into consumer
research could not measure or reveal the deep and abiding emotional
attachment to original Coca-Cola by so many people . . .”1 Coca-Cola had
researched its consumers, but it had failed to develop true intelligence about
them and consequently made a dramatic product error. Coca-Cola hoped that
winning in a taste test would lead to market success. It was wrong. It did the
market research, but it failed to enhance its marketing intelligence.

Proper market intelligence replaces “marketing by hoping” with “marketing

by knowing.” Obtaining appropriate insights into customers’ behavior and
having general market intelligence is critical to marketing success. In July 2019,
retailer Forever 21 included a free gift with online orders to enhance the
customer relationship. The free gift? An Atkins Diet Bar. But Forever 21 failed to
have the consumer intelligence to gauge the reaction of customers, particularly
those who had ordered “plus size” clothing. Social media quickly disseminated
the messages of outrage. Forever 21 quickly apologized, explained that the bar
had been sent to all buyers, not just plus size buyers, and dropped the program. 2
Having appropriate insights into customers’ behavior and general market
intelligence is critical to marketing success.

Since its 1948 start, Porsche has been known for high-performance sports
cars. However, its in-depth consumer intelligence work allowed it to see the
potential for a Porsche sports utility vehicle (SUV). The Porsche Cayenne
became

8191 | Core Reading: Marketing Intelligence 1

Porsche’s best-selling vehicle: Porsche sold twice as many Cayenne vehicles in
2015 as its original Porsche 911. It followed the Cayenne with a successful
customer intelligence–driven entry into the “family-minded,” four-door luxury
sedan market: the Panamera.3

Market intelligence should be at the root of all marketing decisions—frrom

m the
strategic, such as which segments of the market to address, to the more tactical,
tactic
such as advertising copy points, logo, or website design elements.a

Recent changes in technology, particularly in relation to the

th internet and
social media, have revolutionized both the types of questions
ions asked and the
ways those questions are investigated. For example, only relatively
atively recently
would a company like Diesel, the Italian clothing company, face
fac a problem such
as learning that its presence on Pinterest needed boosting.
oosting.4 Th
he digital era has
made online market intelligence–gathering a matter of course,
cour and companies
use a range of tools on the Internet to do everything from basic research to
customer surveys for brand positioning.

Whether a company does its own research or pays a marketing research

company to gather intelligence, the types of research best suited to a particular
question vary. InSites Consulting
g has a well-developed
well philosophy on effective
market research that is captured
red in its “10 Commandments
Com of Contemporary
Market Research.” We consider
con der the last o f these commandments a good
summary of our philosophy on marketing intelligence:

Contemporary market researchers need DJ [disc jockey] skills. . . .

They need to have the ability to choose the right methods and
data sources and throw them in the right mix. Last but not least,
they need to perform well in the boardroom by playing the most
relevant tunes to management 5

This reading provides the basic knowledge that a marketing manager needs to
be able to use those
tho researcher “DJ” skills to full advantage—by setting out the
full portfolio of “songs” that can be played (i.e., techniques that can be used) and
offering insights about when they will be most useful. Furthermore, in this
reading we demonstrate how effective decision-making hinges on marketing
intelligence, which we define as a deep and informed understanding of the
relationship between the customer, the marketing environment, and the
company’s offerings.

aSee Core Reading: Framework for Marketing Strategy Formation (HBP No. 8153) for a full
discussion of the variety of marketing decisions to be made.

8191 | Core Reading: Marketing Intelligence 2

 In the Essential Reading that follows, we begin by discussing a very successful
market intelligence program. We then generalize to an effective research
process and a taxonomy of research methods. This leads to discussion and
practical examples of each intelligence-gathering technique. We then discuss
how the procedures can be leveraged and combined into an effective overall
marketing intelligence program, particularly with insight into customer
behavior.

2 ESSENTIAL READING
Marketing intelligence can help marketers make a variety of decisions, and
perhaps the most important decision is what a company aspires to be in the
marketplace. This is the customer “value proposition” that the company hopes to
bring to market, the special quality that will differentiate the company from
competitors. With a desired product positioning in mind, the company can turn
to decisions on the optimal action plan—the marketing mix of the four Ps—
product, promotion, place (i.e., distribution, or how the firm goes to market), and
price—to deliver that value proposition to the company’s chosen customers.
(For more information, see Core Reading: Framework for Marketing Strategy
Formation [HBP No. 8153].)

Consider, for example, the intelligence program implemented in 2012 by

newly appointed brand managers for Planters Nuts.6 While Planters and Mr.
Peanut, the iconic brand “spokesperson,” were well known, sales of Planters
Peanuts were lagging as consumers moved to options they considered healthier
and more “modern,” such as almonds and pistachios. Planters faced the
following issues: (1) Who should be the target market and what should Planters
mean to them? and (2) What supporting marketing mix could help Planters
reverse its declining sales trend?

The Planters team started with an analysis of the situation using data at hand.
Planters, along with most consumer packaged goods (CPG) firms, purchased
data from Nielsen on market size, market shares of all brands, average pricing
on retail shelves, and extent of distribution in stores. Publicly available data
sources provided Planters with knowledge of the advertising spending by major
competitors, Wonderful Pistachios and Blue Diamond Almonds. Blue Diamond
had also posted a presentation from an almond industry conference setting out
its target markets (e.g., primary market: US women, age 35 or more). Blue
Diamond’s ad theme was “Get Your Good Going” and its packaging featured a
“heart healthy check mark.” The US Department of Agriculture and US
Department of Health and Human Services conducted publicly funded research

8191 | Core Reading: Marketing Intelligence 3

and published the nutrient content of peanuts, almonds, and pistachios. These
data showed that peanuts were, in fact, just as nutritious as almonds and had
fewer calories.

Planters conducted regular, quarterly “brand health” consumer surveys and

thus had its own data on hand about, first, which nuts consumers were aware of
and which were top of mind and, second, the consumer perceptions of Planters’
quality and uniqueness. The team complemented these data with newly
gathered information. A large-scale quantitative survey with a sample of 2,000
people measured consumers’ perceptions of almonds, pistachios, and peanuts on
several dimensions, such as:

Healthy/nutritious
Low in fat
Inexpensive

Although the research showed that there was no health difference, consumer
perceptions favored almonds and pistachios.

To develop deeper qualitative insight into consumers, the team conducted in-
depth interviews: a 60-minute in-home conversation with a consumer followed
by a trip to the store where the consumer could set out how they shopped for
nuts. Finally, the team gathered customers (typically a group of six) who were
past but not current Planters consumers. These customers were asked to bring a
bag of their current favorite nuts with them to the session, where a moderator
led the group through a discussion of nuts, Planters, and competitors. This
produced quotes about Planters ranging from “the best name in nuts” to
“Planters makes me think of the 1950s.”

This collection of data provided the intelligence Planters needed to develop a

new positioning for Planters peanuts. As described below, Planters combined
four different types of data:

Free on-hand or “secondary” data, for example, data on nutrition published

by the US Department of Agriculture.
Paid-for secondary data, for example, the market share and store data
purchased from Nielsen.
Newly collected or “primary” data of a quantitative nature, for example,
consumers’ perceptions of nutrition value measured by agreement with
statements such as “peanuts are nutritious” and “almonds are nutritious.”
“Primary” data of a qualitative nature, for example, the in-depth 60-minute
conversations about nuts that Planters conducted in person in consumers’
homes.
Note also that Planters’ research focused on a variety of actors in the market.
Primarily it directed its research to understand consumers, but it also sought to

8191 | Core Reading: Marketing Intelligence 4

understand the strategy and specific actions of competitors. It also studied the
behavior of collaborators such as retailers, analyzing the shelf space they
granted to the various brands.

2.1 The
The process Research
for market Process
research generallyand Research
follows Tech
the five-step chniqu
model ues
in s
Exhibit
1. As shown in the exhibit, the company should first specify the question to be
answered (Why are sales declining in Brazil?) or decision to be made (Should we
offer a new, lower-priced item to reach price-sensitive customers?). By clearly
stating this all-important initial problem or decision, marketers can then begin
collecting and interpreting useful data.

EXHIBIT 1 The Market Research Process

Source: Adapted and reprinted from Harvard Business School, “Note on Market and Consumer Research,” HBS No. 579-136, by Scott Ward
and Dave Reibstein. Copyright © 1979 by the President and Fellows of Harvard College; all rights reserved.

The second and third steps of the research process are to make decisions
about, respectively, the types of data needed and the collection methods to be
used. Exhibit 2 presents a general taxonomy of research methods and the full
set of data types. Applying this to Planters, the only approach not used is the
“experimental” branch, where research is conducted using test and control
groups.

8191 | Core Reading: Marketing Intelligence 5

EXHIBIT 2 Overview of Research Data and Methods

Note: “Accumulator” refers to whether the data were collected from sources internal or external to the company; “process” refers to the
methodological procedures by which new insights (i.e., primary data) were collected.
Source: Adapted from Harvard Business School, “Market Research,” HBS No. 592-034, by Robert J. Dolan. Copyright © 1991 by the
President and Fellows of Harvard College; all rights reserved.

The fourth step of marketing research shown in Exhibit 1 is to collect the data,
and the fifth and final step is to analyze and interpret the data before presenting
them persuasively in a way tha at, in the words of InSites Consulting’s tenth
commandment, “performs well in the boardroom.”7 This last point is key
because the presentation of the data analysis influences how it will be
implemented. For example, research conducted by Procter & Gamble’s (P&G’s)
Swiffer marketing team produced a recommended action plan that ran counter
to the company’s standarrd global strategy. The Swiffer team’s plan nevertheless
prevailed because of how it was presented. In Video 1, Robyn Bolton (Founder
and Chief Navigator, Mile Zero) explains how the type of research conducted
(team members in the field speaking with potential customers) generated
credibility for the team with top management and acceptance of the team’s
recommendations.

VIDEO 1
Conduct Firsthand Market Research

Scan this QR code, click the icon, or use the link to access the video: [Link]/hbsp2utt4bO.

We now turn to a discussion of the research techniques set out in Exhibit 2.

8191 | Core Reading: Marketing Intelligence 6