September, 2011

Research Perspective and Comments & Analysis

Ten (Plus One) Suggestions For Researchers

by Jim Prevor, editor-in-chief, Produce Business

F or the past seven years, Produce Business has published the Research Perspective/Comments & Analysis pages, a total of 80 columns. When we first began, Bryan Silbermann, president and CEO at the Produce Marketing Association, contributed 52 articles, pertaining to the latest research commissioned by the PMA. Then we opened the doors to professors, research companies and many other organizations.

Typically we respond here to specific research initiatives, but we thought it might be helpful to talk about the general issues that seem to bedevil much of the research done in the trade:

1) There is too much survey research.

An awful lot of research is motivated not by the thirst for knowledge but by the quest for publicity. The media eats up survey results. Publish a survey reporting that consumers are willing to pay up for food safety or pay a premium for organic, and one gets a decent shot of getting a mention in USA Today. Unfortunately surveys by themselves tell us only what people choose to say to the surveyor. The interesting questions either require more research – do these assertions correspond with sales data? – or they require more thinking – why would consumers say this if it is not so?

But more research and more thoughtful analysis both are expensive so they are not often done. So we wind up with survey results being reported as facts when they are really data points in a more comprehensive understanding of the issue at hand. Sometimes more data spreads more smoke than light.

2) Qualitative research must always precede quantitative research.

When we survey consumers, whether via telephone or via store or mall intercepts or home or work visits, the industry often makes the mistake of thinking that consumers have the same understanding of industry terms as the industry does. The truth is that a “fresh-cut” produce item or a “prepared food” can mean something very different to a consumer than it does to the trade. Even a seemingly clear item, say a name such as “Idaho potato,” contains within it great ambiguity. To a consumer, is an Idaho potato any type of potato — round, long, red, purple — that is grown in the state of Idaho, or is it any long white russet-type potato regardless of where it is grown? It is only after one understands the way those that are to be surveyed or interviewed use language that one can even begin to draft a good survey questionnaire.

3) Survey enough people to have valid information for subgroups.

It can be interesting to know the way the country is going on some issue or other, but most business decisions have to be made on a more local level. In other words, one doesn’t just decide to open more stores in general; one has to decide the particular kind of stores to open and where to open them.

The population can be booming in Texas and collapsing in Michigan. The Jewish population can shrink even while the Muslim population explodes. The numbers for omnivores and vegans can see-saw. Beyond the issue of utility, it is difficult to understand the meaning and importance of a study if one can’t figure out the way subgroups are looking. If consumption of grapefruit is sustained at level X because a sub-set of senior citizens is a heavy consumer, the implications for future grapefruit consumption are exactly opposite of what they are if the level of grapefruit consumption is sustained by a youthful interest in grapefruit.

Unfortunately, the focus on the quick boost of an easy headline tends to make the focus of most surveys to be national. Doing larger projects raises expenses and allows for greater understanding but costs a lot more. We need it to happen more as well.

4) Double check with real world interfaces.

The great advantage that the industry has in doing research is that it has access to data that outsiders do not. This could be loyalty card data, UPC data, shipment and receiving data. It is a shame that the industry often does precisely the same survey that someone without access to any data would do. The richest studies double check survey results against actual sales data.

5) Do trials and turn our stores into laboratories testing success.

Very often, studies try to winnow out how people would behave in various situations by trying to look at studies of things that have already happened and winnow out what consumers did in some situation or another. This is fine, of course, and often useful. However, the real job of our VPs of produce can be helping to make dreams come true – dreams of the industry for greater consumption and dreams of individuals who have products and services to promote. 

There is only one real way to know what will be the effect on sales of sampling mangos – that is to sample mangos and keep track of the results.

6)  Test market.

Commodity promotion boards are often heavily pressured to produce immediate results. Consequently, they often spend their money on large scale national programs. In many cases, the money would be better spent on small test markets determining what actually works before rolling out a national program. What mix of TV, radio, print, outdoor advertising, online marketing, social media and in-store promotion is optimal to boost sales? One can’t test enough variables nationally, but this is exactly what test markets are for.

7) Distinguish between the attributes of your promotion and the value of promotion itself.

Years ago, the 5-a-Day campaign had convinced some stores to jazz it up with a 5-a-Day promotion. As sales improved in these stores, the stores issued press releases saying that this proved that promoting 5-a-Day was an effective tool to boost sales. Perhaps. But it was just as likely that the test proved that promotion boosts sales.

In other words, if the retailer did exactly the same thing, but instead of 5-a-Day, those signs, aprons, etc., had said “Support your Farmer,” perhaps the results would have been the same. We don’t know because there was no control group. A study such as this would have required a Group A control with only normal promotion, a Group B control with promotion of an alternate slogan, and Group C would have been the 5-a-Day campaign.

8) Sustain the study long enough to know if the results are long-term.

It is one thing to boost sales of garlic for a week. That might be a useful trick if one wants to make an end-of-quarter number, but that is an entirely different matter than increasing total purchases of garlic. A promotion that only shifts sales around is a far less valuable promotion to retailers and the industry than a promotion that actually persuades consumers to buy more.

Studies need to be sustained over long periods to see how the sales curve is affected long after the promotion is over.

9) Think of the whole department, indeed the whole store.

Often commodity promotion groups do studies that claim to show that promotion of their crops increases sales or profits, but actually shows nothing of the sort. If your study points out that your commodity typically gets two feet of display in the back of the department and your study finds that with a 20-foot display at the front of the department, sales and profits will boom, one really will generate a yawn from most retailers. After all, that prime slot in front with the 20-foot table is already selling something that has been selected for that spot.

The research obligation is to show that switching that prime space to your commodity will produce higher sales or profits; in other words, that your item should go there rather than the current selection.

In fact, even this is a little simplistic. After all, different items have secondary effects. That table devoted to Iceberg might be less profitable in and of itself than a table devoted to something else. If, however, the Iceberg table drives purchases of tomatoes, cucumbers, onions, mushrooms, croutons, salad dressings etc., it might still be the most profitable option.

If you get a really enlightened chain, they might value a study that shows that if the table is filled with high-value raspberries, the berries will attract to the store a client who spends big bucks on seafood, prepared items in the deli and expensive balsamic vinegars, olive oils and fine wine.

It is complicated and expensive to do these studies, but they are all the way to add value to an association with your group or company.

10) Consumption vs. sales.

Sometimes we focus on sales statistics but, particularly, with new items, careful study needs to be done to verify consumption. Otherwise the sales are not likely to be sustained. It is true that a wag once said that Arm & Hammer was the greatest marketer in the world, having persuaded consumers that it was good thing to buy their product, put it in your refrigerator for a month, then throw it out and buy a new one. Yet even this is a form of consumption in which the product is being used for its intended purpose of, in this case, odor control.

In contrast, children might demand collard greens if the package has enough cartoon characters – but how many times will parents buy collard greens if the children don’t eat them?

In foodservice and especially school cafeterias, one can mandate vegetables be served with a meal, but one can’t mandate that children eat them. This may go on for a surprisingly long time, but building a business model on selling items that consumers won’t eat is a fragile foundation for a business.

One Bonus Thought: The answer you get depends on the questions you ask.

The hard part of research is not collecting answers; it is understanding the questions. With the recent resignation of Steve Jobs, it is important to know that no studies or surveys told him that we all needed to have a graphical user interface on our computer, or that we needed small devices to listen to music while jogging and that we needed to buy that music online.

No surveys told him we needed little pads with which to read magazines. Survey results, most research in fact, is about incremental improvements to the existing world. The great genius of people like Jobs is hearing questions that nobody ever asks. So, perhaps the greatest lesson is to not expect too much from research. The world of tomorrow will not be built from a survey response. If we relied on research of this nature, we wouldn’t have iPads. We would have better carrier pigeons.