Dana Mason, ’16, is the brand manager at Chicago-based Cresco Labs, a vertically integrated cannabis and medical marijuana company.
In an emerging industry category, the “why” is powerful. Everything is up for question, because the category itself is evolving quickly.
To get insight on consumer tastes, the cannabis industry can use some traditional information, such as sales data on what people are actually purchasing. We run all the traditional analyses and models against where the trends are going, and then, when possible, overlay that with demographics and other consumer information.
As traditional data is often hard to come by in an emerging industry, non-traditional data sources become even more critical. This means listening and looking for the data around us. It is vital to listen to the team members who are the ones talking to store owners, retail buyers, wholesalers, and growers every day. We need to understand what they are seeing, and what people are saying to them. We also look at industry publications and what’s happening in the news: How are people talking about cannabis? The cannabis industry is still a bit of a Wild West, and with every state where it becomes legal, we have another incredible source of information. We can look at how the recreational market plays versus the medical market, and how the regulations match up within each market.
“It’s about always looking at the industry through the question of: Why are we doing this? And if the answer isn’t for the consumer, that begs the question, should we be changing this?”
Because there are gaps in traditional information—a lack of historical data—we have to look beyond what’s going on in the industry. We look into consumer preferences from other industries, though they might not be entirely related. We review social media platforms to begin to understand how people are responding to certain ad campaigns, or to see what people are posting about. If you go through Twitter, you can begin to uncover common themes, and if you look enough times, you can start to cross-link to see what people are responding to, both in the category and outside of it as well. You can get a sense of what people posting care about in general—and where our industry or product has a role in that particular trend.
This is where the educational foundation that you get at Booth becomes so powerful. It doesn’t just teach you to look at your set of Nielsen data and analyze it. It’s about understanding the data and the sources of that information around you. At Booth the first thing you ask is: Why does this matter to a consumer? Successful brands have an expressed purpose and rigidly stick to how they’ve built out who they are. Thinking about that insight and using the data is how a brand comes to life in a way that’s authentic and has true meaning for the consumer.
So again, it’s about always looking at the industry through the question of: Why are we doing this? And if the answer isn’t for the consumer, that begs the question, should we be changing this? That continued questioning allows us to begin forming those connections to see what is a fad, what is a trend, what’s the exception to the rule, and what is the information trying to tell us.
Sarah Moshary is assistant professor of marketing and a Robert King Steel Faculty Fellow. Her research interests include work on the pricing of political advertising on TV, the privatization of liquor sales in Washington state, and price obfuscation in e-commerce.
The rise of e-commerce means there is so much more data available; companies can see not only see what people purchase, but also what they’re browsing. That kind of data suggests new ideas about what potential buyers are considering, which gives a sense of their tastes.
But I’m not sure that all companies, or all businesses, should think this way about how customers’ tastes are evolving. If you’re always looking backward to infer consumer tastes, you’re often running to catch up. One of the interesting aspects of marketing is that it lets you actually influence the way that tastes evolve. Through advertising, you can make people aware of your product, let them know why your product might be to their tastes, or even help them imagine what a new product might be like.
An example would be a ride-hailing platform such as Uber or Lyft. When these platforms first launched, it wasn’t clear that the idea would take off. At the time, a lot of folks worried that it was dangerous to enter a stranger’s car simply because an app on your phone indicated the driver was available. It wasn’t even clear where the demand was, since there wasn’t a market for it yet—but ride hailing has been a tremendous success.
“The digital world has opened up a ton of new avenues for advertising and for consumer exposure to your product.”
So that’s one of the things we teach in the marketing group: how to market an innovative product that’s really a step ahead. You might not have much indication about how people are going to evaluate the product, so you might use survey tools such as conjoint analysis to piece together who has a taste for it and how much they will value it. Broad economic forces have a hand here. For example, urbanization in the United States over the past several decades has changed consumer needs and tastes. In particular, as people move into cities, their transportation needs change, and their family sizes change. Those are things you can see in the census data.
The digital world has opened up a ton of new avenues for advertising and for consumer exposure to your product. There’s traditional digital advertising, and there’s social media influencing. I think we’re still navigating how influencing works as a society: What are the rules around disclosure? What sort of transparency is needed when companies are paying for placement? The digital era has ushered in a renewed push to measure the impact of advertising. And that’s really tricky.
One thing that we’re starting to see companies do, and I think it’s a good strategy, especially in certain consumer goods markets, is customization, where companies crowdsource some design elements. Nike did this. They have in-house designers, of course, and they sometimes collaborate with other famous designers, but they also crowdsource designs. Nike’s “On Air” is a design competition that gives people an opportunity to create their own shoe, and winning designs are produced and released to the public.
Using these strategies, you can market a product that jumps ahead of consumer tastes rather than struggling to keep up.
Reed Semcken is a Full-Time MBA student. He is a co-chair of the Marketing Group and recipient of the Jim Kilts Scholarship. He currently serves as the head of marketing at Medean, a Chicago-based fintech startup.
The bedrock of my marketing education comes back to what I learned in my first marketing class with professor Sanjay K. Dhar [the James H. Lorie Professor of Marketing]: the three c’s (consumer, company, competition) and the four p’s (product, price, promotion, place). Being cognizant of how the four p’s revolve around the most important c, consumer, and leveraging data and direct consumer insight to educate your decision is how marketers can best react to changing consumer tastes.
The real challenge facing marketers is how to find a balance between the quantitative side of marketing, which is so powerful but can potentially lack the nuanced details that you may need to refine your product, with the voice of the customer, which can provide invaluable insights but may be biased.
In my Consumer Behavior course taught by [professor of marketing] Daniel Bartels, we learned how consumers will say they want something, but the way they act can tell a very different story. In my role as head of marketing at personal finance fintech company Medean, we were trying to figure out how to differentiate our products from bigger personal finance companies. We heavily utilize user testing at Medean, but were running into consumer biases as we were trying to optimize the homepage of the site—for example, some interviewees would avoid saying anything negative, not realizing that’s exactly the feedback we were looking for.
“We use data to find out where consumers find delight with the app, what they engage with, and where they drop off.”
At that point we turned to our user engagement data to see what people were using in the app, and what they weren’t using in terms of the features we provided them. Using the combination of data and user testing, we were able to make a more educated decision on how to optimize the signup process and user experience.
Going back to the four p’s, at Medean I utilized what I learned in my classes about determining the optimal channel for your customers to engage with your product. We started off with a website, but soon learned that our target audience engaged with their finances almost exclusively via their mobile devices, so we needed to develop our mobile app immediately and couldn’t rely on a web-based product. It also influences how we adjusted our product; we use data to find out where consumers find delight with the app, what they engage with, and where they drop off. That helps us understand where we need to refine the product—which features to emphasize and which to eliminate or revamp.
Combining data and direct consumer insight can help a company evolve with changing consumer tastes, but as Professor Dhar says, it’s a never-ending process. You need to continue following what your consumers are doing and studying what the data is telling you—because tomorrow, what your consumers expect from you as a company and a product may be different.
MORE IN THIS SERIES
What Can Sports Teach Us about a Leadership Mindset? »
How Can Humans Work with Artificial Intelligence? »
Amid a career dedicated to addressing energy challenges, Julie McLaughlin, ’13 (XP-82), is adding a new title to her resume: novelist.
Science Meets Fiction for an Alumna Novelist
The Nobel laureate and his former student—now the namesake of Chicago Booth—discuss a friendship that goes back half a century.
A Fireside Chat with Eugene F. Fama and David Booth
How can marketers build relationships with customers within an ever-evolving digital world? Two professors point the way forward.
Reaching a New Breed of Consumer
