Great advances in marketing science have occurred over the past 30 years, indeed. Needs segmentation, simulated test marketing, brand equity, and, most recently, customer equity are all examples of significant discoveries that have happened in the field since the 1970s. But let's take a closer look at how companies actually apply "marketing science" today. As we do, bear in mind the Webster's definition of science: "systematized knowledge derived from observation, study, and experimentation carried on in order to determine the nature or principles of what is being studied." Something that is scientific, says Webster's, is "based on, using, or in accordance with, the principles and methods of science; systematic and exact."

At most companies, senior management hands marketing managers a set of revenue objectives and deadlines, typically driven more by perceptions of what the company needs to do rather than what's realistic or possible. Feeling pressed for time, these managers typically ask researchers to run a few focus groups, make 100 phone calls to test a concept, or undertake one of the many other popular techniques we refer to as death wish research which are to marketing science what snake oil is to medicine. They promise a magic fix-all that's quick, low-cost, and painless for anything from a market segmentation to an ad test, but the end result is far from a miracle cure.

Take the three-minute segmentation study, a name we have given to one conventional death wish technique for determining which group of buyers to target. A real scientific approach to targeting would consider all possible market drivers—category involvement; product preference motivators; product purchasing patterns; media habits; sociographics; demographics; psychographics; and more—and test them using both qualitative and quantitative research. At this point in time, the scientific approach takes three to five months and costs $200,000 to $1.2 million, depending on the consulting firm. While three to five months is nothing to a scientist—just think of how long it takes to research and develop a new drug—it's everything to a marketer.

Enter the pseudo-science of the three-minute segmentation, when marketers invest three minutes to intuit three or four variables they feel might be best to segment buyers. They interview a few hundred buyers in the category, almost always by phone or over the Internet and do cross tabulations on the data revealing something as straightforward as "15% of the buyers in this category account for 85% of the volume" or "25 to 54-year-old-women account for 78% of sales in this category." Not exactly a science-driven breakthrough discovery.

Or take the way many companies typically develop branding strategy. There are numerous well-known creative design firms that offer "branding" services, which usually include a "brand audit." The audit is far from a systematic or balanced evaluation of marketing programs and performance. The typical brand audit consists of interviews with employees and select customers to determine "what the brand stands for." [Which usually is nothing remarkable.] This anecdotal research with a handful of people will not provide the insights necessary to develop a road map for forward-looking multi-million dollar marketing and business decisions.

In reality, what most companies consider "marketing science" is more akin to 18th century medicine—when doctors used blood-letting and/or leeches to treat everything from the flu to cancer. It's crude; it's simplistic; and it's terribly dangerous. Marketing today should be as much of a science as it is an art, but we have a long way to go before this is a reality. Marketers can start by carefully distinguishing between the real scientific tools and techniques that they can use to test ideas from quackery.

What does it take to make it into the Hall of Fame and Shame? Famers have achieved great marketing success adhering to marketing fundamentals such as clearly defining a profitable target and a compelling positioning, developing strong advertising which clearly communicates benefits, and maintaining superior customer service. Meanwhile, Shamers have encountered product flops and declining performance. They have no clear positioning or target customer group and their advertising is completely forgettable or confusing—sometimes down right silly. Their brands simply blend into the crowd while they give away a first-mover advantage and brand equity.

Though marketing dollars may have been in shorter supply this year, we had plenty of marketing greats and gaffes to choose from. We combed through industry reports and reviewed submissions from marketers from around the world, narrowing down the field to a final list of six Hall of Famers and seven Hall of Shamers.

One of our favorite nominations came from a marketer at a consumer goods company that intends to subject its marketing team to what sounds like a horrifying experience: forcing them to don costumes, perform professionally choreographed dance numbers, and lip-sync to songs about their product categories, complete with a laser light show. Not only is it horrifying, it's expensive—at least a couple hundred thousand dollars to stage, not to mention the work hours dedicated to rehearsal. The purpose of this bizarre event? To motivate the sales force. Huh? Seems like a cash bonus would have been more effective and efficient as a motivational tool with sales, all without belittling the marketing team. [Does senior management really think the sales force will go out and sell more after hearing song and dance numbers about salad dressing set to the tune of "We Are the Champions" and pampers set to "My Girl?"] But we'll keep this one in mind for next year when we hear what happens with sales force performance.

So after careful consideration, we proudly [but in the case of the Hall of Shame, sadly] present the 2002 inductees:

What have last year's inductees gone on to do? Well, Hall of Shamer McDonald's for one has fallen further from grace, with even Wall Street proponents now turning their backs on the Golden Arches. Though many disagreed, we've been saying for years that McDonald's had no marketing strategy and were hardly a brand to emulate at this stage in their history. Without a strategy, the company made consistent blunders like the Deluxe line launch, "Made For You" operational system, and the red and white exterior color change to restaurants, all of which did little to stem the defection of customers to BK, Wendy's, and the plethora of meal replacement alternatives available—or win the confidence of franchisees and investors, for that matter.

Thanks to everyone who participated in this year's nomination process. For the full scoop on our inductees, please visit: www.counterintuitivemarketing.com/hall.html

Stay tuned for our monthly Hall of Famer and Shamer at: www.counterintuitivemarketing.com/hallofthemonth.html

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This question seems to be very much on the minds of marketers these days. As the average age of their core group of customers continues to rise, so too does concern and anxiety that there won't be anyone to replace them. Instead of sitting back and watching as their market shares slip away, companies including Guinness, Levi's, New Balance, McDonald's, and Toyota have announced plans, launched products, or developed programs within the past year to appeal specifically to younger buyers.

Clearly these companies are looking to grow their share of the lifetime value of all the buyers in their respective categories. While they want to sustain what they have in the short-term, they also need to get and keep new buyers entering the category to survive in the long-term. According to ACNielsen, going younger is a growing trend: "What many [companies] are trying to do now is develop a campaign that attracts the consumers when younger, so that they will become loyal buyers before they reach that ... age group where they become very committed to a brand."

But there's a vast difference between a company looking to maximize lifetime value and becoming one that targets teens. Companies like Alloy, Delia's, YM Magazine, and the WB Network all specifically target younger buyers and when a customer outgrows them, they say so long, no hard feelings. But this is very different than what a Guinness, McDonald's, or Toyota is trying to do—they never want to have to say good-bye.

While this might sound fairly obvious, many companies have made the costly mistake of pursuing a demographic instead of lifetime value. Feeling pressure to go younger, the GAP, for instance, refocused merchandising on more youthful consumers, featuring trendier designs, fabrics, and colors, while carrying very little of the casual basics their existing older customer base had counted on. Core customers defected in droves and the GAP's vision of trendy didn't mesh with the younger audience. Now the retailer is trying to woo both sets of buyers back.

With the GAP's blunder serving as a case in point, companies have to tread very carefully to attract younger buyers without neglecting or, worse, offending, existing customers—a situation made more difficult by budget constraints. Even when companies develop entirely new brands to appeal to young people as Toyota has with its new Scion line, its still a complex trade-off to figure out how to most effectively and efficiently use limited marketing dollars to positively impact profitability the most in total, not just in one age group.

Here's where marketing science applications that identify the drivers that have the biggest impact on the purchase decision among age groups and forecast the financial outcome of an investment of marketing dollars make a difference. The tool we'd use for this kind of problem would be customer equity optimization, which essentially tells companies what kind of marketing programs will return the most (for more information on customer equity, click here).

Our advice to companies contemplating going younger: don't be the next GAP. The equity companies have built up among current customers—even if they are older—is far too valuable to risk playing a guessing game with.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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The subject of a recent PBS series, Commanding Heights traces the "individuals, the ideas, the conflicts, and the turning points," in an exciting account of the world's economic history over the last half-century. Moving from country to country, the authors recount the different approaches governments have taken to economic development and the eventual movement to a free market model. What's particularly appealing about the book—and the TV series—is the discussion of why some free markets economies took off and others floundered.


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As promised in last month's edition, we have available for download the two Copernicus presentations given at The Conference Board of Canada's Marketing 2002 Conference: Proven Strategies to Build Marketing Success. Our presentation on counterintuitive marketing offered important advice for companies looking to avoid commoditizing their brands, break the price-cutting habit, and develop truly differentiating marketing programs. Roland Rust, a member of the Copernicus Board of Advisors, gave a talk on customer equity optimization, demonstrating how companies can ensure they invest limited marketing dollars in the programs that will have the biggest impact on the bottom-line.

Click here to download, "Counterintuitive Marketing."

Click here to download, "Using Customer Equity Insights to Make More Profitable Marketing Decisions."

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