A TCI Book Review

The Marketing Revolution ­ A Radical Manifesto for Dominating the Marketplace Kevin J. Clancy and Robert S. Shulman HarperBusiness, New York, 1991, ISBN 0-88730-481-8

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The authors contend that by and large marketing plans are formulated on the basis of intuition and guesswork, by marketing professionals who have no real appreciation for their science. To demonstrate the point, early on in the book, they explode several 'marketing myths' ­ notions that are part of the conventional wisdom of marketers that have empirically been proven false. (This is a topic to which they return in their subsequent book Marketing Myths That Are Killing Business: The Cure for Death Wish Marketing).

"We believe ­ and we demonstrate throughout this book ­ that a company can stand out in this [increasingly competitive] environment, that computer-aided market-planning technology exists today to help companies make their marketing decisions. But even though marketers have far more data than in the past (so much indeed that it¹s become a form of intellectual pollution) and even though computer programs can manipulate that data faster and less expensively than ever, neither the data nor the computer is the solution.

The marketing revolution in the 1990s is management's recognition that, for every decision in the marketing mix, the company must evaluate hundreds, thousands, tens of thousands, even millions of alternatives. And it must evaluate all these alternatives in terms of forecasted profitability ­ not appeal, demand, share, sales, or warm "feelies".

We¹ll show you what's wrong with many marketing tools in wide use today ­ focus groups, gap analysis, perceptual maps, and more. And we describe the tools a manager can use to evaluate alternatives in order to generate profitable solutions to marketing problems." (p. 14)

In a nutshell, the authors argue that a major problem with marketing today is that (1) not enough alternatives (i.e. potential combinations of market segments, price points, product attributes and other dimensions of the marketing mix) are assessed, and (2) that assessments do not focus on evaluating the bottom-line profitability of each segment.

Clearly, to do a proper job of market evaluation, significant computer power is required, as well as correct (meaning valid and reliable) market research data to go into these models. It is not an inexpensive proposition, and the authors do not hesitate to suggest that you really need to call in the experts to do a proper job of it. (Not too coincidentally, the authors are two thirds of Yankelovich Clancy Shulman, one of the largest market research and advertising firms in the world, and which undoubtedly has the capability to do one of these monster studies.) They tout their own expert system, Litmus, as a key tool in assessing all the relevant combinations and permutations, but to be fair also mention various competitors¹ products such as Assessor, Bases and ESP.

This, then, is the marketing revolution: the use of tools and models that will thoroughly and rigorously assess the profit potential of all possible market segments, and in the process turning marketing from an art into a science. It¹s a grand vision, and even makes sense for those organizations that can afford it. The smaller firm, however, or the not-for-profit organization, will be left wondering how they can get in on the action. Here the book is less clear ­ 'marketing on a shoestring' is not within the set of concepts that they play with.

The book does, however, contain some useful information that will be of use to any marketer. For the most part, this consists of warnings on various research techniques (most of which fall short when compared to the grandiose expert systems that are capable of doing so much). Among the pointers in the book in this regard:

• focus groups may be great for brainstorming and generating ideas, but to use them to get reactions to a product or an advertising campaign and then extrapolate this to a target population is asking for trouble because they are non-representative of a target market (p. 87)
• perceptual maps can be extremely misleading, because people don't naturally think in terms of just two or three dimensions to a product (p.92)
• choice modeling (the technical term for this multiple regression technique is multinomial logit analysis) will steer you wrong because the number of variables chosen for inclusion in the analysis may not be those that really do influence decision-making behaviour, just those that are available to the researcher (p.98)
• gap analysis is problematic because the ratings of 'degree of importance' and 'degree to which product possesses attribute' may relate to different groups in the sample, and thus false conclusions may be drawn. (For example, 50% of a sample may have rated attribute 'A' as 'very important', and 50% rated it as 'not present' in the product ­ leading to the conclusion that it was necessary to incorporate attribute 'A' into the product in order to increase market share ­ if, however, none of the 50% of the sample rating the attribute as not present felt that it was important ­ which is quite conceivable ­ then a very incorrect inference will have been made.) (p.100)
• quadrant analysis is a more powerful technique that either perceptual maps or gap analysis, but still suffers from a limited number of dimensions that are able to be explored (p.105)
• strategic cube analysis, which takes cognitive, affective (feelings) and behavioural dimensions into account is much better as a predictor of buyer behaviour and market share, but still must be used with caution (p. 109)
• concept tests for a new product or service are generally not effective, because of sample limitations, measurement reliability problems ­ especially with regard to intention to purchase, and the fact that they fail to evaluate 'what if' considerations (e.g. what if the colour was blue? what if the price was 10% more?) ­ incidentally, they do discuss the merits of the 11-point Juster Purchase Probability Scale as being a superior way to ask purchase intention questions in this section (p. 126)
• multiple trade-off analysis (or conjoint analysis) the authors recommend as a more efficient way to evaluate many concepts simultaneously (p. 133)

There are also various principles that the authors espouse as key underpinnings of a successful marketing strategy. These are:

• heavy users are not your best prospects ­ simply because there is not much room for them to increase their usage ­ your best bets are highly defined, likely smaller market segments that are currently non-users or low users, but who have high potential for growth ­ Chapter 4 is devoted to this topic
• the most appealing product (based on market tests and consumer research) is often the least profitable (because of all the bells and whistles put into it to make it attractive to the market) ­ the law of diminishing marginal returns tends to come into play here ­ see Chapter 6
• extensive research is necessary to build up a price elasticity curve for each major target market ­ see Chapter 7
• the message engineering approach to developing effective advertising is presented as a useful tool ­ see Chapter 8, which outlines the various steps involved
• perfect service (zero defect policies, and 'maximum delivery' service response) is not optimal, again because of the law of diminishing marginal returns ­ a high, but not 100%, level of service will maximize profitability ­ see Chapter 10
• tracking the outcomes of a marketing strategy is absolutely essential ­ see Chapter 11

The Marketing Revolution is at once a very illuminating and very frustrating book. Illuminating, in the sense that the flaws that the authors point out in several popular research techniques are very real and dangerous: frustrating, in that the operation of the expert system alternatives is never very explicitly spelled out, and is very expensive in any case.

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