Tuesday, October 21, 2014

Live from #TMRE14: Why Marketing May Not Matter Much

Itamar Simonson
Stanford University Graduate School of Business Professor of Marketing Itamar Simonson explained how the rise of today’s informed and empowered consumer is subverting marketing convention.

Simonson, co-author of “Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information,” reviewed the ways in which brands in many categories—moreover, branding, conceptually—and traditional constructs like loyalty, positioning and targeting are losing relevance and effectiveness.

Consumers have unprecedented, immediate access to information and their preferences are increasingly transient, malleable and subject to the influence of other consumers, he noted.

What matters is current experience, not prior performance, Simonson emphasized. 

Accordingly, brands as value proxies and loyalty as a purchase driver are waning.

The implications for market research may be significant.

Simonson argued that to try to predict future behavior by measuring consumer preferences today will prove increasingly difficult. 

He said he expects loyalty metrics like NPS and lifetime value measures to lose utility and that market research will focus less on tracking and more on conducting quick experiments (A/B testing, etc.).

Marc Dresner is IIR USA’s sr. editor and special communication project lead. He is the former executive editor of Research Business Report, a confidential newsletter for the marketing research and consumer insights industry. He may be reached at mdresner@iirusa.com. Follow him @mdrezz.

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