Brand Insights: The Use of Choice and Online Methods
TRC Conference Summary - June, 2010
On June 3rd, 2010, TRC in partnership with New York Chapter of AMA hosted a market research event titled Brand Insights: The Use of Choice and Online Methods. TRC's Chief Research Officer Rajan Sambandam spoke about choice methods that can measure brand value. TRC's Executive VP Pankaj Kumar discussed the importance of accounting for consideration stage when developing predictive models. And TRC once again invited its academic friends from Wharton Business School and Columbia to share their latest work and ideas from the field of market research.
"How to Measure Brand Value"
Rajan Sambandam, Chief Research Officer, TRC
Rajan's session dealt with the issue of understanding brand value using research. In particular, it focused on the idea of brand equity (the intangible component of brand) and how it could be accurately measured in dollar terms using choice modeling. Rajan used an example with Discrete Choice Conjoint analysis to demonstrate how the premium commanded by different brands can be estimated. Then using the purchase funnel as a framework he talked about how incorporating consideration sets into the process can provide a more meaningful and accurate estimate of brand equity premium. Finally, he talked about how awareness can be included in the process to help understand the sources of brand equity. In sum the discussion showed that research, and in particular choice modeling, can be very useful in estimating and understanding brand equity thus providing guidance for a firm on brand strategy.
"Want Choice? Show Some Consideration for Your Brand First"
Pankaj Kumar, Executive VP, TRC
It is widely acknowledged that consumer choice is a multi-stage process. First, consumers form a consideration set, and from among the brands in the consideration set, a choice may be made. In this research, we develop a model of brand choice that integrates consideration stage. The model allows the consideration set to be dynamic across purchase occasions and quantifies the impact of market-mix factors on consideration shares and choice shares. The improvement in prediction rates for the two-stage models over the base logit models is in the range of 40-60%. The average reduction in error from base models is in the range of 30-72%. The model can aid brand managers to better understand competition and brand positioning in at least two important ways. First, it quantifies the impact of consideration not only on brand choice but also on brand competition with respect to their consideration-set shares and choice shares. For instance, in our data we find completely different competitive market structures as compared to established choice share structures. Second, the model incorporates the effect of marketing mix variables on consideration and choice shares separately allowing managers to make resource allocation decision to affect consideration and choice. By giving information on both fronts this model can provide strategic insights to managers and also resource allocation guidance at the tactical level.
"Mine Your Own Business: Understanding what People Say About Your Business Online"
Oded Netzer, Associate Professor of Marketing, Columbia University
Oded presented a way for companies to monitor the marketplace in a substantially different manner from traditional marketing research. The exponential rise in online gathering places such as blogs, forums and chat rooms has given rise to a vast quantity of unsolicited information about companies. Oded presented a way by which companies can efficiently summarize this information to understand how the market sees them. The process starts by downloading the textual information from relevant sites, subjecting it to advanced text mining software and developing perceptual maps of how companies and concepts relate to each other. Using examples from the auto and pharmaceutical markets, Oded showed that this process can both confirm existing perceptions and unearth new insights otherwise unavailable.
"A Matter of Opinion: The Role of Social Networks in New Product Diffusion"
Raghu Iyengar, Assistan Professor of Marketing, Wharton School, University of Pennsylvania
Raghu used a pharmaceutical example to explore the idea of social contagion and how this process influences the way a new product spreads through a social network. First, he discussed the ways of measuring the influcence that a particular member of social network has -either self-stated or based on the opinions of others. Next the actual spread of a new drug was tracked through the prescribing behavior of a network of doctors. The network was identified by the doctors themselves through their influences and referrals. The results showed that there wasn't as much of a relationship between a doctor's self opinion of influence and the opinions of others. The surprising results included the identification of pivotal members of the network who had a huge role in the spread of the drug, but who would not have been identified through conventional means.