Goizueta Faculty Interview: Doug Bowman on marketing research trends and the skills today’s business school graduates need to have

Professor of Marketing Doug Bowman joined Goizueta Business School in 1999. Business Librarian Ann Cullen, a frequent collaborator of Professor Bowman for his marketing classes, interviewed Professor Bowman in January 2018. He shares his insights on the complexity of marketing decisions and how shifting the research focus from “asking” to “observing” can lead to better insights on consumer behavior. 

GBL: Your research has encompassed the areas of consumer purchasing behavior and investigating the effects of various approaches to marketing mix and competitive marketing strategy. Can you tell me more about how you came to explore these areas?

DB: The marketing mix refers to the suite of marketing tactics available to marketers. A key task for marketing managers is to think strategically about how to allocate resources across the elements of the marketing mix. A large branch of research in marketing focuses on understanding differences in the relative effectiveness of marketing mix actions across brands, markets, and time. For example, one of my very first research papers found that the pioneer (first entrant) advantage was not just an automatic regularity, but instead was found in a differential effectiveness of marketing instruments linked to a brand’s order of entry into a market.

The accepted wisdom was, if you were first, you were better, just because you were first. What I found was that a brand’s marketing mix elements – its price, distribution, advertising, etc. – could have a different level of effectiveness, depending on when you entered the market. If you’re early, then your advertising should be more effective because in some ways, you’re ingrained in people’s minds.

GBL: And so, the messaging matters.

DB: Yes, and you have to work harder if you’re a later entrant.

Broadly, my research has been stimulated by an interest in understanding and explaining the response to, and relative effectiveness of, actions that marketers can and do take to influence the observable behavior of customers and competitors. Beginning with a managerial question, problem, or decision, my research generally develops a framework or extends theories by adding new dimensions (e.g., moderating factors) to explain or describe the issue of interest, develops a model of the process, and then uses the model to empirically test the assumptions and theories proposed.

GBL: As part of one of your class assignments you have students visit the supermarket as a form of experiential research. Can you tell me more about this and why you structure this assignment this way?

DB: The assignment puts students in the position of a brand consultancy wanting to ‘show their stuff’ to a potential client. It requires both primary and secondary research. The former included a survey of actual consumers to obtain data to support activities such as a new product concept test, and market visits to understand how a product is merchandised in-store. The latter included working with many of our library databases to understand things like a brand’s advertising effort over time, and the size of a market.

One inspiration for this assignment was some work I was doing with our executive education team for Coca-Cola’s McDonald’s Group. An aha moment for me was the amount of time their senior managers were spending out in the field on what they called market visits. They were trying get a handle on what prices consumers were actually paying for essentially the same product in a geographic market, and how their products were possibly merchandised differently by various restaurants and retailers. Part of the assignment is me motivating students to mimic that behavior. Go out to stores and make some observations. And, market visits can also be helpful interview prep as it can set a student apart.

There’s a concept in marketing called waterfall pricing which basically means as the pack size gets bigger, the price per unit should get smaller. Consumers expect this. Students investigate whether that is happening? Does it vary across stores? Does it vary across brands within a store? You might see a steeper waterfall with say, the national brands like Coke or Pepsi than you might see with the private label brands, like a Kroger brand. Merchandising is a term that marketers use for everything that goes on in the store. How are the products merchandised? How much shelf space are they getting? What products are they adjacent to? Which brands are placed at eye level? And then they speculate why. Unless you put students in the shoes of a manager, they typically don’t really realize that there’s so many decisions going on. And, it’s a lot of fun for them too.

Students come back and say “I’m now a more astute shopper,” or “there’s probably a lot of thought that went into category merchandising in an effort to affect buying and shopping behavior than I realized”.

GBL: In a recent presentation at Goizueta you made the comment that marketing research is moving from the domain of “asking” to that of “observing.” Can you tell me more about what you mean by that?

DB: Asking refers to approaches like surveys, focus groups, and depth interviews. There used to be an entire industry largely dedicated to helping companies find customers to participate in these. These techniques still exist, though surveys are now often DIY, as services like Google Consumer Surveys, Survey Monkey, and Qualtrics make it easy to find customers to survey cost-effectively.

Observing refers to tracking actual behaviors. This could be their online or offline behavior, the latter being ethnographic techniques that have their roots in anthropology. Tracking is a natural byproduct of online environments. The ability to track and observe customers over time is a key motivation for the proliferation of firms investing in large scale customer databases. Among other things, customer databases allow the marketer to tailor offers to specific customers. If Home Depot knows that I just bought a lawn tractor, hopefully the next time I go to their website they’re not trying to sell me another lawn tractor, they want to sell me accessories for that lawn tractor.

Tracking customers over time supports the notion of the customer as an asset that has future value to an organization. It allows the organization to think about managing around the concepts of acquisition and retention.

GBL: You received a research grant from Google a few years ago. What did that research entail?

DB: The basic idea was to try and understand the relative effect of brand-generating communications (e.g., advertising) versus consumer-generated media (CGM) (e.g., blog posts) on the perceptions consumer form about a brand, and then ultimately on the brand’s sales and market share. Some highlights of the findings are that negative comments in CGM have the greatest negative impact on sales; and, negatively toned comments on social media are an early indicator of consumer-initiated complaints to a firms’ consumer affairs department.

GBL: You have held a number of leadership roles at Goizueta. Given your experience with the school’s different programs, what do you think a student graduating from Goizueta needs to understand about marketing today?

DB: First, the structured thinking skills and frameworks we teach students are timeless, including basics like the marketing process to analyze, strategize, and execute. And, growing sales either through primary demand (new users to the product category) versus secondary demand (current customers buying more; stealing share from your competitors’).

Second, being data-driven in how we approach business decision-making. Data trumps opinion, and often trumps rank. When you’re new to a company one of the ways to get to be a contributor is by bringing some data insights, because there’s already other folks in the room that are contributing by bringing their experience. In terms of what students need to understand about data analysis I’ll use the analogy of a making a great meal. You need three things: the right ingredients, strong culinary skills, and a great presentation. And similarly strong data analysis needs the right data, good data analysis skills, and a great presentation. Part of the school’s job is to make students aware of the data available to them, including data accessible through the library. In addition data analysis tools are becoming increasingly accessible through user-friendly interfaces. So effectively presenting and getting your analysis used in decision-making is where the current opportunities seem to lie.

GBL: And so thinking about new graduates, particularly young entrepreneurs, if I’m a graduate from Goizueta and I’ve got this great idea, how could I use data to position myself? Do you have some examples of some alums you know that have used data in an interesting way to communicate their value?

DB: When I think about entrepreneurs and data, one of the things they’re often trying to do is determine size a market. What’s the extent of this opportunity? Through a combination of surveys, observation, maybe some secondary research, they should be seeking some sort of convergent estimate rather than simply pulling a number out of the air or backing into a number based on their desired profit or sales. Part of our job is to equip graduates with the skills to get appropriate data and the tools to analyze it. So, when an entrepreneur pitches to potential investors for resources, it’s not just “here’s what I think.” It’s, “I’ve done the analysis.”

GBL: What current research projects and areas of research are you investigating?

DB: One project looks at the drivers of co-brand performance. Another looks at the relative weight placed on online versus offline sources of information that consumers rely on when making a purchase decision. Another looks at content engineering of images.

In thinking about research in marketing, I like the analogy of engineering. Engineering is applied physical science; applied geology, applied chemistry, applied physics. Marketing is applied social science; applied economics; applied psychology; applied sociology. I am an empirical researcher, who fits most with the analogy of applied economics.

GBL: Tell me about your research on co-brand performance. Can you describe what cobrand performance is?

DB: A co-brand is just two brands on a package. It could be say, Rice Krispies plus Skittles, though I don’t believe there’s such a thing. (laughter) The core idea is to investigate whether it’s best for two really strong brands to get together, or maybe it’s better for a strong brand to look at a brand that’s not quite as strong, because there’s tension around the complementarity.

GBL: Like Reese’s Pieces in an ice cream brand or something like that?

DB: Yes. The question people ask is, should I be trying to find the strongest brand partner? Or, should I be trying to find someone that complements me on a weakness that I have, but maybe isn’t necessarily the strongest kind of brand out there? People have different opinions, we’re compiling a data set that’s large enough to make some reasonable generalizations. That’s one of the biggest differences between research in academia, and research in industry. In academia, you’re trying to find a generalization that transcends context and categories. Whereas if you’re in industry, you’re trying to find some sort of unique insight that will help your specific brand get better in your specific context or category.

GBL: What is your favorite business book?

DB: One that I use heavily in my teaching is, “Grow by Focusing on What Matters: Competitive Strategy in 3-circles,” by Urbany and Davis. They present an easy to understand tool for thinking about how your product or service is positioned vis-à-vis customer wants/ends and competitors’ offerings. It also helps to make salient the ‘white space’ or unmet needs, and areas where the firm is potentially over-investing in offering benefits not appreciated by the customer.

GBL: What does success look like for you as it relates to the value and contributions the business librarians make to GBS?

DB: Compared to other schools I am aware of, our librarians are much more integrated into the teaching and research of the school. They are true partners and embedded co-creators.

Their approach with students is exemplary. They put the time in to coach a student; a much more time consuming process than just telling someone, so the skills and knowledge get transferred to the student. It would be easy for a librarian to say here it is, you got it, now go. But you don’t. You take the time to transfer the knowledge to the student which I think, can be a little painful at times. But, at the end of the day, we have developed a much stronger student.

I remember you telling students one time to, “ask yourself where did that data or report come from?” Why did someone put it out there? People don’t do things like that without a motivation or reason. It’s everything from white papers, where the publisher is potentially trying to convert a reader into a consulting gig or something later on, to a student being exposed to a library database that they might use later on in their careers. There are all sorts of valid reasons, and part of your job as a student is to assess what is going on. I think our librarians do a great job at those sort of big picture skills that students need to have.

Our librarians do a great job at ensuring we have a suite of data and data sources that is second to none. Importantly, they push to create opportunities for students to actually use the product. Having librarians embedded in some of our classes is a good thing. This includes classes that are entirely project-based like IMPACT, and some, like my class, where their involvement is for an assignment or two. The librarians are playing key roles in both of those formats.

Sometimes students tell me how talking about a class assignment was helpful in their job interviews. For example, last year an undergrad told me how impressed Gap was when she talked about the data sources she used in a class project. She got the job.

Compared to some other schools where the business library is sometimes within the B school, we’re in separate buildings. I think that has turned out to be a good thing, as it has forced the students to seek out the library, and in some ways it’s forced the librarians to seek out the students.

GBL: What are three words that come to mind when you think of the value and contributions of the business library?

DB: Student-focused; Committed; State-of-the Art