Marketing Science

In this series of blog posts, researchers from the Ehrenberg-Bass Institute share some major marketing science discoveries from the past fifty years. www.MarketingScience.info

3 January 2013 - 4:24pm | 0 comments

Elizabeth Gunner and Nicole Hartnett of the Ehrenberg-Bass Institute for Marketing Science discuss how marketing can be viewed as a science

Elizabeth Gunner and Nicole Hartnett work for the Ehrenberg-Bass Institute for Marketing ScienceElizabeth Gunner and Nicole Hartnett work for the Ehrenberg-Bass

In this series of blogs researchers from the Ehrenberg-Bass Institute, part of the University of South Australia, will share with Drum readers the major marketing science discoveries from the past fifty years, as well as explaining marketing laws and their practical implications. The first blog in this series comes from Elizabeth Gunner and Nicole Hartnett and discusses how marketing can indeed be viewed as a science.

Marketing science. These two words may seem a strange pair. When separated everybody nods their head, but when they are put together you get a lot of furrowed brows. Fields commonly associated with science are medicine, engineering, physics, even mathematics, but probably not marketing. But can marketing be a science?

What is a science?

The word science comes from the Latin sciential, meaning knowledge. Science isn’t (all) about test tubes and Bunsen burners; it is about finding evidence to explain the world we live in. Scientists make observations about the real world and look for patterns (scientific laws) that hold under different conditions. Understanding these scientific laws means that we can make predictions and explanations about how the world works.

For most of human existence there was no science. Even the medical field began as theories dreamt up by people who drew on little more than their common sense. For years doctors studied and practiced using these unsupported theories. Bleeding, for example, was widely used by doctors to cure illness, including the common cold or flu. Theories without empirical evidence like bleeding (which we now know caused more deaths than it did recoveries) nearly always turn out to be wrong, often costly, and sometimes fatal. Science has transformed medicine, just as it has every single discipline that it has touched.

So why don’t we consider marketing as a science?

The biggest problem for the marketing field is that many marketers work like medieval doctors - they work as if the scientific laws don’t exist, and instead make decisions based on intuition and common sense. But marketing science does exist. Compared to other fields of science it is relatively new, infrequently taught at universities and much less present in textbooks, but it does exist. What’s more, marketing science has lots of implications for practitioners and can provide great insights to assist with marketing planning and decision-making.

Marketing as a science

Marketing science works in the same way as other branches of science. Marketing scientists make observations about the real world and look for patterns (scientific laws) that hold true under different conditions. Then they use these laws to predict how buyers will behave and to explain how marketing really works. In marketing, conditions include different industries (cars, soft-drinks, pharmaceuticals, petrol, etc.), countries, time periods and brand size. The laws of marketing hold across these conditions and can be proven and explained with numbers, graphs, tables and equations.

Marketing Science in practice.

Marketing thought and practice are increasingly being informed by science, however, a scientific approach is not used as much as it ought to be in research, and many marketing professionals remain unaware of the major marketing science discoveries. There are several reasons for this.

1) Because it conflicts with what is already believed and accepted.

A lot of marketing science goes against what is commonly taught in universities, written in textbooks and practiced in industry. Marketing is still an industry dominated by theories based on common sense and folklore. One of the most commonly believed marketing myths is that marketers need to build a customer base that is deeply passionate about the brand. This quest for loyalty is reinforced in textbooks, classrooms and by marketing practice all over the world. But it is a myth.

What marketing science has proven is that sole loyalty, i.e. buying only one brand in a determined time period, is very rare and that these people tend to be infrequent category buyers, hence not very valuable to a brand. This has been evidenced using purchase data from hundreds of product categories, all over the world. Even the brands that are heralded as “loyalty leaders” don’t break this norm when you look at the data. For example, Apple’s buyers are believed to have almost cult-like loyalty, within the personal computer category.

Apple has a repeat buying level of 55 per cent - slightly more that we would expect given Apple’s market share, but not very different from that of competitor brands. Although this metric indicates slightly higher loyalty, we’re still seeing almost half the people that chose Apple for the first purchase switching to a different brand for the next purchase.

2) Because marketing is not like the natural sciences.

Some believe that laws in marketing aren’t possible – that the heterogeneity of individual customers, the range of competing options, the constantly changing media environment, etc., mean nothing is stable and everything is about context. Given this worldview, predictions are impossible.

The Duplication of Purchase (DoP) Law, another significant marketing science discovery, is a great illustration of why this is not true. As we’ve already discussed, sole loyalty isn’t very common, which means that brands share customers with each other. The DoP Law tells us that brands share customers in line with their market share. This means that brands share more customers with bigger brands and fewer customers with smaller brands. We observe this pattern over and over again with data from different categories, countries and time. Of course we can’t predict which brand a specific customer will buy next time, but on an aggregate level we can accurately predict what percentage of a brand’s buyers will also buy which competing brand.

The danger for marketers that don’t understand marketing science is that they end up focusing on the wrong things. Many brand managers are shocked by the percentage of their customers that are buying other brands, so they waste money and resources trying to increase loyalty. Instead, if they understood the DoP Law, they would expect a certain level of sharing. With this knowledge brand managers can focus on something they can change, like trying to increase market share by bringing in more, new customers, not “deepening” loyalty with already existing customers.

3) Because marketing, particularly advertising, is all about creativity.

Some advertisers fear that marketing laws will stifle what is a very creative industry. However, marketing science can actually help marketers get the most value out of their advertising spend. Marketing science has taught us a lot about advertising.

One thing that we’ve learnt is that only one third of people who have the opportunity to see a commercial (i.e. are tuned into the program) are actually actively watching the commercial. The other two thirds are either actively avoiding (e.g. left the room) or passively avoiding commercial content (e.g. chatting, feeding their cat or co-consuming other media). We also know that ads at the start or end of a commercial break are more likely to be remembered, even those in shorter ad breaks. This doesn’t mean that the creative component of advertising isn’t important, but that the best results occur when creativity is paired with the scientific knowledge. After all, it doesn’t make a scrap of difference how creative a commercial is if nobody sees it or if those who do see it can’t remember which brand was advertised.

The rise of marketing science.

When compared to evidence-based science, common sense (no matter how commonly it is practiced) always comes up short. The marketing field is changing, slowly, as more and more academics, practitioners and students are learning the value of a scientific approach to marketing.

Elizabeth Gunner and Nicole Hartnett work for the Ehrenberg-Bass Institute for Marketing Science. Its non-profit research into the fundamentals of marketing and buying behaviour has been supported for more than a decade by global corporations such as Procter & Gamble, Unilever, Nielsen, Coca-Cola and Turner Broadcasting.

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