Can big data replace marketing research?
The answer is No, however big data will improve market research and improve the optimisation of market segmentation and market mix analysis.
Just because big data is used to determine a market segmentation, leading to the development of an initial market mix, does not eliminate the requirement to fully test the hypothesis through the traditional methods.
As highlighted in Lisa Gevelber presentation: As INSEAD’s Niessing describes it: “Executives still have to make the same strategic decisions that they have always made. They need to understand market dynamics and what competitors are doing—and then determine how the company should react. The only difference is that we now have a great deal more data and analytics to help make these decisions.”
Marketing Research verse Market Research
For the purpose of this post marketing research is defined the whole process of finding a solution to a particular problem, whereas market research is a component of the overall process aimed at finding the data to be analysed, using various tools and techniques.
Image: Focus group
Where can big data provide advantages:
- Reduce the cost to conduct a search of secondary data – accessible
- Reduced time of data collection and analysis
- More accurate research through deep data mining – authoritive
- Data can be real time and relevant information – timely
- The data mining, analysis and collection processes are repeatable – trustworthy
- Can be both secondary (general information) and primary sources (targeted collection) of data – holistic
- Reveal additional insights
Where big data can be a drawback:
- Distracting for organisations through volume – gluttony
- Misguided research or analysis (not properly understanding the context in which the data was derived) – imprudence
- Not specific or targeted at the particular segmentation – generalised
- Incorrect interpretation of data can mislead marketing decisions – disagreements
- Complacency leading to not following up findings with targeted research (not investing further to consolidation or clarification of the issues)
- Expose organisations to privacy and data ownership type issues
- Information can be skewed / manipulated / sabotaged by action groups / specific campaigns
Big data may lead to the discovery of more questions or problems however at least they are no longer blind spots.
Research conducted by Accenture found that the biggest stumbling block is moving from data to insight to action.
Testing hypothesis could be through traditional processes and even refining the big data.
- conjoint analysis
- focus groups
- perceptual mapping
- further mining of data (big data)
- streamlining data collection (big data)
Business managers must ensure that a strong emphasis is put on data science rather than data scientists. Lisa Gevelber presentation quotes “Data scientists are technicians who are very good at managing and manipulating data,” says Wharton’s Fader. “Data science is about looking for patterns, coming up with hypotheses, testing them, and acting on the results. Research conducted by Accenture found that the biggest stumbling block is moving from data to insight to action.
Understanding the issues to be resolved, defining the problem is still the key point in the process of any marketing research project. Big data can certainly improve the market research and even provide unexpected insights, however managers and executives must still make the decisions based on the facts and be accountable for the outcomes.