We know Prof Theo Verhallen mainly as professor of Marketing, director of the research department at TIAS and director of the top institute TiSIL; the Tilburg Social Innovation Lab. Verhallen has worked within three faculties of Tilburg University and his research interests are therefore broad; he has published on market orientation, developing new products and creating new business activities. Here we go 'back to basics' in search of the role marketing now has within many companies and the role that is desirable.
Verhallen sits down for a glowing speech. "We currently see that for many companies, marketing equals marketing communication. Products are developed and it is then up to the marketing department to market them. They can then do something with the price, but still mainly focus on marketing communication. In addition, we see that it focuses on the short term. It is not about strategic communication, but about marketing tactics.
"It's not about the drill, it's about the holes."
A campaign in which a brand is built has become a rarity. But in particular, the fact that marketing, and thus the market, is only involved in a development project at such a late stage is a missed opportunity. For several reasons, by the way. Not only do you run the risk of developing products the market does not want, you also run the risk, especially in B2B, of not getting the price for them that is potentially feasible. As for the latter: research has shown that where you involve the customer in the development of a product, they are not only willing to pay a higher price, but are also more satisfied with the end result at the bottom line. So you get a better price and higher customer satisfaction if you involve the customer earlier in development."
Product development triangle
Verhallen strongly believes in a triangle in product development and has also seen in practice at Unilever and Philips, among others, that this works: "Innovative products should not be developed purely by clever engineers, but by a triangle in which technology, market research and marketing have a prominent role. A consumer lab is just as important as a technical lab; see how consumers use products and learn from that. The advertising agency should actually join at this stage too. Especially if products are very conceptual." Verhallen nuances: "But if you involve consumers in your product development, it has to be done thoughtfully. We often see a strong cognitive approach where consumers are asked to name pros and cons. That can give a very distorted picture. We once asked within a survey how people would like to use a certain product and what you would then encounter. The last question within the survey was which of the products people would want to take home. Almost without exception, that turned out to be the product about which people reported the most objections. So know how to interpret answers. Here it turned out that products that received objections were also the products that were already being used in mind."
Need for solutions
Of course, the professor also knows that for many products, the whole market research phase is currently skipped. Manufacturers are in a hurry. Time to market seems more important than diligence.
He paints an even more worrying picture. The product is not matched to the market and people often don't even know what that market looks like. "Start-ups were asked who their customer is. 'The one who will buy from me later' was the disconcerting answer. Too many entrepreneurs have no idea at all about the customer they want to reach. Recently, due to the crisis, a huge group of new self-employed people have re-entered the market. I see that these are actually all people who think from their product and not from the market. It is often thought that customers are looking for products and services. But if you delve more deeply into what customers really want, you discover that they mainly need solutions. Solutions they enjoy or that take away their 'pain'. 'It's not about the drill, it's about the holes' is a well-known metaphor we use a lot for this in marketing. Successful companies get that."
Creativity matters
This talk by Verhallen is a plea for marketing to be taken seriously and for its scope to be broader than mere marketing communications. Yet he would like to say a few words about that marketing communication too: "Creativity is very important within it. Especially to achieve uniqueness. We see that many products are marketed in a similar way and within a similar emotional domain. All beer brands pretend to be authentic and are drunk with friends. Research has shown, that if you ask consumers after such a message which brand this advertisement was from, they fill in the market leader in around eighty per cent of cases. So all the smaller players who fail to claim their own emotional domain are actually advertising for the market leader." Verhallen himself has a long history in the international market research department of multinational Unilever. However, he does not believe that good marketing (communication) is reserved for big companies. "On the contrary, I would almost say. It is much easier for smaller companies to send out an unambiguous message anyway. And even with a small budget, a lot is possible in, especially, tactical marketing communications."
Professor Dr Theo Verhallen was an external consultant at Capital Advertising for many years. He was involved in various marketing and market research issues.