Marketing Research I

F R O M T H E T O P

Marketing Research is "Critical" jnterview conducted by Michelle Wirtft Fellman

M arket research is crucial to a cor- poration's marketing process, says Herb Baum, who joined the

Pawiucket, R.I.-based Hasbro Inc. toy manufacturer and marketer in January as its president and chief operating officer. Baum. who built his career on a market- ing foundation, now is responsible for the day-to-day management of the oper- ating, marketing and sales activities around the glohe for Hashro, which had $3.3 billion in sales in the fiscal year '98 (ending in December of last year). Until December '98, Baum was the chairman and chief executive officer of Quaker State Corp. (which then merged to become the Houston-based Pennzoil- Quaker State Co.). During Baum's five- year tenure at Quaker State, the compa- ny's sales more than doubled and operat- ing earnings grew seven-fold. In addi- tion, Quaker State made eight acquisi- tions and introduced such consumer products as the world's first motor oil in a clear, plastic bottle—^all under Baum's leadership.

Baum also spent 15 years at Campbell Soup Co., for which he spear- headed such projects as the introduction of Prego Spaghetti Sauce, the company's first major new product introduction and which today is among the most pop- ular U.S. brands. Baum previously worked at Needham Harper & Steers advertising agency.

Baum contributions have been recog- nized by the marketing community. He has won the American Marketing Association's Charles Coolidge Parlin

Herb Baum, president and COO of Hasbro Inc.

Award for outstanding contributions to marketing and the AMA's Edison Award for marketing innovation.

This summer, Baum talked with Marketing Research about how he views the marketing research function based on his experiences as a senior corporate officer.

MR: From your point of view as a senior corporate officer, how would you rate the marketing research func- tion in its usefulness and actionability to companies you've managed?

HB: It's an integral part of the total marketing function. I don't think any- body ought to be making marketing deci- sions without some form of research, because you can waste a lot of time and money. What it really does is it helps you understand your consumers or your customers. !t allows you to do marketing

with knowledge. I would say research helps you hedge your bet on the deci- sions you made.

MR: How does the market research function compare with other functions in a company, such as purchasing, finance, line marketing, or ni;inufac- turing/operations?

HB: It's kind of like anything else; it's an important part of managing a company. It's generally part of a market- ing department or a marketing services group, so that it's not in most companies a whole department in itself independent- ly like purchasing might be, or like mar- keting might be. It's really a subgroup within the marketing department, but it certainly has value to the company. And as I said before, you really should not be making marketing decisions without the proper marketing research, both quantita- tive and qualitative.

MR: What's the strength of the marketing research function?

HB: It helps you understand your con- sumers and your customers. So it s a crit- ical element in the decisions you're mak- ing on how you run your business. It's very valuable in fine-tuning what you're doing. So it's a validation of the direc- tion you're taking, and it allows you to market with knowledge.

MR: What are some weaknesses of the marketing research function?

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HB: The only real weakness that I find is there is a lot more qualitative research used to make big decisions than I'd like to see. There are decisions in this company and olher companies I've been involved with ihal are made coming out of focus groups, which is as we all know are nothing more than directional and certainly aren't a validation of a concept or an idea or anything else.

MR: How can market research improve productivity in any organization?

HB: In my opinion, it could improve productivity if the department were run with the permission, so to speak, to initi- ate projects rather than be order-takers. Generally it's a brand group, a marketing department, a key executive, or whatever (or whoever), that says: "We need the following research..." I believe the researcb people who tend to be more keen to market trends on a daily basis should be right in tbe planning stages, and all of us should have their input as to how we ought to go about finding out tbe tbings we need to find out, rather than telling them what we want. Along the .same lines. 1 think they would be more productive if they were more part of the total process, as opposed to being called in cafeteria style to do a project.

MR: Do these kind of changes come from the top officer level or from the market research level?

HB: To make these changes, it bas to come from our level. I come from a marketing background, so I kind of count on market research. But if a CEO or COO comes from a manufacturing background or a financial background, they may not be as dependent as 1 am on marketing researcb.

MR: Which activities have you found to be of value to you as a CEO—predicting consumer trends, marketing models, product tests, copy tests, strategy or segmentation studies, marketing mix analysis, promotion testing and evaluation—and why?

HB: Predicting consumer trends is right up there at tbe top for me because it kind of tells me wbere markets and where people are going. 1 like lifestyle studies, psychographics. and just how people are thinking and what they're doing in all areas of their life. I believe tbat copy testing tbat is directional is good. 1 don't believe you ougbt to test advertising after you've made it because it's too late to do anything about it other than run it; but you've already paid for it. So 1 believe in up front copy testing. Product tests: in our business, you can"t do product tests, because everything is too confidential. Lifestyle studies, cre- ative fine-tuning... those are pretty much wbat I'd be looking at.

MR: Looking into the next century, what role will market research play in business?

HB: 1 think it'll continue to play a very important role because we're dealing witb shorter time periods, more precise infor- mation, and 1 think, as 1 said earlier, mar- ket research helps you hedge your bet on tbe decisions you're making. It's a part of tbe validation process, and you'll make fewer mistakes if you use researcb in tbe right way.

MR: Seeing how competitive busi- ness has hecome in a high-tech, global environment, how can market research ensure that it will gain acceptance by management as companies are pressed to provide quick turnaround and may not want to take time to do the appro- priate market research?

HB: Fast is not always better. 1 think there are times when you make a quick decision without the benefit of research, but if you've got a big decision tbat is strategic to your company, then you ought to take time to validate that decision with the appropriate researcb. (Otherwise the consequences will be) bad decisions.

MR: Do you have any words of wis- dom to market researchers today?

HB: 1 would just say to stick to your guns, take the lead, initiate—rather than just take orders—and look for new ways of assessing consumer trends and consumer demand that will help the key executives of a company. •

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