A study of market research information use by clients of market research providers
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1 A study of market research information use by clients of market research providers ABSTRACT The use of outsourced market research (MR) is poorly researched, providing only a fragmented understanding of how MR information acquired from a third party is processed and used by client organisations. Drawing from a systematic review of organisational learning literature, this paper proposes a seven-stage process of MR information use and then explores this framework using an exploratory study with three companies. Usage commences with the acquisition of MR information, its subsequent transformation by the market research function, followed by dissemination among users who analyse and interpret this information. They apply these insights directly in marketing decisions or store the insights for future applications. The findings provide initial support for the proposed framework. Users apply insights generated into shorter-term (instrumental) or longer-term (conceptual) use, and claim that others in their organisation apply MR information for symbolic purposes, including power-seeking and legitimising. Findings also suggest that MR engagement is not complete until clients of outsourced MR information have exhausted the knowledge acquired, which is consistent with findings from the solutions literature. This presents an opportunity for MR firms to exploit if they understand and can harness the group dynamics involved in clients use of MR information to address decision support needs. Key Words Value-in-use, market research, information use, B2B service
2 INTRODUCTION A US$28.9Bn global industry, the market research (MR) industry is a B2B knowledge service where MR organizations provide knowledge solutions to customers. Market research is often outsourced by organisations intent on identifying opportunities and situations as well as those seeking to generate and refine marketing actions (Malhotra & Birks, 2006). Market research (MR) information is that information resulting from the analysis of data collated through market research activities, intended to support marketing decisions. A market research (MR) project is a single piece of market research that is conducted to exacting specifications in terms of scope, time and cost as agreed between the MR client/user and the MR service provider. VALUE PERCEPTIONS OF MARKET RESEARCH The literature has long identified a gap between what is expected by clients of MR and what they receive from MR suppliers (Neal, 1989). Market research firms seem to focus on what they deliver to their clients: that is, they take a goods dominant view of value embedded in the data or information supplied by the producer (Brennan, Canning & McDowell, 2011; Vargo & Lusch 2004; Woodruff & Flint, 2006). This view is typical of traditional notions about value as a feature owned and controlled by the supplier, but is in contrast to a more recently accepted cocreation view that value is always uniquely and phenomenologically determined by the beneficiary (Holbrook, 1994; 1996:138). A service-dominant logic view would argue that customers co-create value with their suppliers (Vargo & Lusch, 2004; 2008; 2010). And furthermore that value is created during the use of MR information within the customer space (Macdonald, Wilson, Martinez, & Toossi (2011). Our understanding about what happens when customers use MR information remains fragmented. This is because of the limited number of studies in this area and because of the way the topic has been researched. Most empirical studies have adopted a single informant, crosssectional survey approach (like Deshpandé, 1982; Diamantopoulos & Souchon, 1996; Diamantopoulos & Horncastle, 1997; Diamantopoulos, Schlegelmilch & Allpress, 1990; Maltz & Kohli, 1996; Moorman, 1995; Moorman, Desphandé & Zaltman, 1993; and Moorman, Zaltman & Deshpandé, 1992, and Sinkula, 1990 among others). However, there is a paucity of research adopting a processual approach to MR information use. This means that we currently have a disconnected view about a collective organizational process. HOW ORGANISATIONS LEARN FROM MARKET RESEARCH Organizational learning theory focuses on the processes of information use and knowledge, leading to changes in behaviour among executives in response to market stimuli. Taking a largely social constructionist view, this theory inspires market-based learning (MBL) theory (Sinkula, Baker, & Noordewier, 1997). Under a MBL view organizations committed to learning
3 generate market information which in turn is disseminated across the different functions and applied in marketing decisions. The emphasis in MBL is on the flow and use of MR information between MR suppliers and their customer organizations - where use of MR information is limited to a number of actors situated within the marketing or MR functions (Sinkula et al., 1997). There are three key limitations of the MBL view with regards to the use of MR information: Firstly, the MBL view focuses on the marketing function, however it is the entire organization that learns to adapt to new market realities rather than just the marketing function. This implies that other functions within the customer organization are involved in MBL. Secondly, the MBL literature relates to knowledge as an asset open for utilization, ignoring Crossan, Lane & White s (1999) view that knowledge is a process on its own, embedded in action, and which is developed in retrospect to make sense of action in terms of acceptable rationales (Daft & Weick, 1984). This process view relies on the iterative, interactive and experiential aspects of co-creation of knowledge as opposed to a mere exchange between actors. Thirdly, the fact that not all organizations resort to outsourced MR information suggests that organizations create their own knowledge about markets. And even where organisations outsource the collection of MR information, the supplier-customer dyad co-creates knowledge (at least in part) rather a simple one-way flow of knowledge from supplier to customer. THE MEANING OF USE In our systematic review, we appraise peer-reviewed scholarly literature on the use of MR information from three connected yet separate perspectives: the meaning of use, the usage process, and the users of MR information. The meaning of use is not free from ambiguity in the literature where "use" is either undefined, or presented tacitly if not implicitly assumed. This makes the concept of "use", "using" and "usage" an ontological oversimplification. Some scholars deal with this oversimplification by specifying the type of use: instrumental, conceptual and symbolic use, drawing from Beyer & Trice (1982). Instrumental use involves action based on MR information in specific, direct ways, intended to influence external constituencies (Moorman, 1995:321). This implies a high level of information specificity. By contrast, conceptual use relates to less specific information, with indirect application of the information which may happen only in the longer term (Moorman 1995; Maltz & Kohli 1996). Symbolic use involves the application of selected information in specific situations immediately upon the availability of information or after a period of gestation (Beyer & Trice 1982) typically in response to political stimuli for instance, by consciously controlling the information use to justify pending or past behaviours. A generally accepted view in MBL literature is that MR information processing involves four phases: acquisition dissemination application storage, mostly consistent with Baker & Sinkula (1999). But variations on this framework suggest that:
4 1) instrumental use relies on prior determination of information needs (Leonidou & Theodosiou, 2004), 2) users assimilate MR information through a process of understanding and interpretation before it is internalized for application among decision makers (Cohen & Levinthal, 1990; Diamantopoulos & Souchon, 1996; Zahra & George, 2002) 3) a level of learning happens after application of MR information in decisions, involving codification of knowledge and its storage in an organization s memory (Diamantopoulos & Souchon, 1996; Huber, 1991; Sinkula, 1994). This shapes future marketing decisions involving conceptual and symbolic use of MR information (Diamantopoulos & Souchon, 1996). Taking into consideration these issues, we propose a seven-step use process as follows. MR information is acquired and transformed into understandable, comprehensive messages by the MR function, which in turn, diffuses these messages among relevant decision makers (users). These decision makers, in turn, weigh and analyse the content in the context of impending decisions, interpreting and merging MR information with other available information (from other sources) to create insights, with or without the intervention of other MR information users. These insights are in turn applied in marketing decisions, or stored in knowledge banks (directly or in the form of lessons learnt from application in earlier marketing decisions) that support future marketing choices. EMERGING QUESTIONS Our literature review indicates limited understanding of how individuals in organizations deal with MR information before reaching marketing decisions. It is evident that group behaviour (which mediates between individual and organizational levels of learning) is under-researched. The literature also offers an incomplete explanation about how organizations process MR information whilst interacting with third party suppliers. Single informant approaches involving self-completion quantitative measures that investigate causalities are inadequate to offer a complete view of a process where customers co-create knowledge and value through use of MR information. A more complete understanding of the process of MR information use will come from answering the following questions: a. How does a client organisation make use of MR information? b. How do client users engage in instrumental, conceptual and symbolic use of MR information? METHOD The research questions were addressed through use of in-depth interviews with a selection of MR information users, MR information buyers and users of MR insights within three organizations: a leading charity, an established academic institution and a leading medical devices manufacturer. All interviews, which followed an interview protocol, investigated the stages of the MR information use process.
5 All organizations featured a strong MBL culture, manifest through significant investment in the acquisition of market information and generation of intelligence as well as generally perceived rapid and decisive response to market stimuli. These characteristics were evident in the responses made by the five participating interviewees. Verbatim transcripts of interviews were coded under three general themes: 1) steps involved in MR information processing within client organisations,, 2) roles of individuals and groups in MR information use, 3) the application of MR information in marketing decisions. INITIAL FINDINGS In all three organizations, MR information usage follows the proposed seven step process: acquisition transformation diffusion analysis interpretation application embedding. Users aggregate in groups on a project-by-project basis and apply insights generated collectively into their marketing decisions, either in the shorter-term (instrumental use) or longerterm (conceptual use) (Beyer & Trice, 1982). Whilst none of the participants admitted to use of MR information in a symbolic manner, their comments suggest the existence of other users within their organizations who had made use of MR information for symbolic purposes including social use (Menon & Varadarajan, 1992), power-seeking use (Beyer & Trice 1982) and legitimating use (Vyas & Souchon, 2003 after Sabatier, 1978). The interviews, however, did not reveal how these behaviours manifest at individual or group levels. Evidence from the interviews suggests a number of influences impacting on the usage process. Firstly, limitations in resources composing the MR function as well as trust afforded by users in the same function encourage users involvement in MR information processing, which in turn helps developing an intimate relationship between the MR function and users of MR information. The organization s strategic orientation seems to spur users reliance on insights as well as rapid processing of market information to make sense out of available actualities. These factors encourage users to become committed to MR information, manifest as: a) continued need to acquire MR information, which in turn is translated into meaningful insights by the MR function together with external MR information suppliers. b) the application of insights in decision making a step that relies on intra-functional communication. Users facing the need for immediate insight create a demand for MR information. This demand pushes the MR function to diffuse MR information through cascaded communication. Users analyse and scrutinise such information to determine its reliability, typically together with members of the MR function. Perceptions of reliability and trust appear to help users in interpreting marketing insights to understand the context of a marketing decision, enabling them
6 to enact immediate decisions and longer-term learning, which in turn shapes future marketing decisions. IMPLICATIONS AND CONCLUSIONS These findings suggest that an outsourced MR project is not complete until client users of MR information effectively have exhausted the knowledge acquired from the MR information. This is consistent with Tuli et al. s (2007) finding that clients of solutions frequently expect a more extended engagement with the supplier, than the supplier is prepared to deliver. This presents an opportunity for MR firms to augment their service by helping their customers after the delivery of the contracted MR information. Prospects for better co-creation of knowledge (and value) include assisting customers in the interpretation of MR information, supporting them in the integration of MR information with other sources to create insights and helping to disseminate the MR information and insights throughout the client organization. MR firms can exploit these opportunities if they understand and harness the group dynamics involved in customers own use of MR information. LIMITATIONS AND FUTURE RESEARCH This paper presents a seven-step conceptual framework of use of MR information developed from a systematic review of the literature. An initial exploration of this framework finds some support. However, in two of the organisations the study is limited by a single informant approach. In all cases the study was dependent on participants memory of events. Relying on just interview discourse, this study also has limitations in construct validity. These limitations will be overcome in the next phase of the research that will involve an ethnographic study of MR information user groups.
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