Market Research: Worthwhile Or Waste Of Time?
While many famous names in the industry have questioned the value of market research, Asher Hunter, managing director at research firm Metrix Consulting begs to differ.
Steve Jobs and Henry Ford are both well known for their skepticism about the use of market research.
At a 1982 planning retreat, someone on the Mac team, “thought they should do some market research to see what customers wanted. ’No,’ [Jobs] replied, ‘because customers don’t know what they want until we’ve shown them.’”
Henry Ford famously stated “If I had asked people what they wanted, they would have said faster horses.”
I agree with the sentiment behind both these quotes. Asking consumers what they want is poor research and just plain lazy. Where I disagree is when people trot out quotes like this as justification for dismissing market research as a valuable tool in the innovation process. In reality, these quotes highlight two common pitfalls of poor market research in the world of innovation and growth strategy:
- Consumer Deferral – the tendency to ask the consumer directly for the answer to the business question. Essentially using consumers as a substitute for doing the marketers job.
- Scratch the Surface – research that is narrowly defined and fails to uncover underlying motivations and is based on existing business paradigms.
Fortunately, there are ways to overcome these pitfalls.
Understand people, don’t ask people
Henry Ford was correct when he said “If I had asked people what they wanted, they would have said faster horses”. Yes that is true, but what if you asked them why they want faster horses? It’s likely that people would respond with “to get home from work faster”. Ask them why again and we might find that they want more time to spend with their family. Establishing and focusing on the core need ‘faster transportation and freedom’ without the category frame of reference (horses) provides a more fertile base for innovation. We can then apply our grey matter and creative thinking talent to come up with a solution for the core need of “faster transportation and freedom” – enter the automobile. I have oversimplified this example (needs are multidimensional and require context), but it illustrates an important point – understand people, don’t ask people.
Key learnings:
- Make sure your business objectives are clearly differentiated from your research objectives
- Observe and listen to people before asking direct questions
- Stop yourself from asking consumers about what YOU or YOUR COMPANY should be doing
Define your business around needs
The Harvard Business Review paper ‘Marketing Myopia’ by Theodore Levitt, explores this topic in more detail. He argues that companies should not be defined by the products they sell, but by the needs they meet. British Rail suffered because they defined themselves as a railroad business rather than a transportation business. As marketers, we often look at the world through the lens of our category or our brand, and most of the information we receive (sales data and research) is organised in this fashion. Unfortunately, this rarely matches up with how consumers view the world. It’s often this category tunnel vision that obscures the real opportunity to identify breakthrough innovation opportunities that exist beyond category boundaries.
Key learnings:
- Seek to understand relevant life moments/ occasions within a broader competitive context
- Avoid prompting consumers with marketing defined categories
Triangulate from multiple viewpoints
Jobs, and Apple in general, is a great example of having a deep understanding of today’s world, without letting the paradigms of today stifle the possibilities of the future. While others were focusing on improving mobile phones, Jobs was focused on making mobile phones obsolete. The iPhone was born out of setting a broad frame of reference and looking at the world from multiple viewpoints.
On one hand Apple understood that people have multiple needs – they want to communicate with others, they want to capture important moments and they love listening to music. They also understood technology enablers – improved wireless telecommunications, miniaturization of digital camera hardware and increasing data storage capacity.
There was also a strong company leverage point, iTunes – an ecosystem for delivering entertainment. Couple this with the fact that before the iPhone people required three devices to meet these needs and you can see why the iPhone is such a big success. It’s about using research to understand people, but also looking beyond the immediate category to identify trends that triangulate around an opportunity.
Key learnings:
- Use a central framework to connect information from multiple sources – macro trends, technology enablers, global innovation trends and consumer research
- Involve a core team from multiple disciplines in the planning process
- Talk to experts from outside of your typical industry definition
Moving Forward
Great market research can be instrumental in developing the solid strategic insight that unpins successful innovation. On the flip side, poor market research that fails to go deep enough or delegates business decision making to the end consumer, is more dangerous than no market research.
Avoid the pitfalls of poor market research and keep these three guidelines front of mind the next time you set out to explore the innovation and growth strategies available for your company:
- Focus on understanding people rather than asking them to solve your problems
- Build your learning and research context around core needs, not your existing business paradigms
- Bring together information and insight from multiple viewpoints
Investing in getting the right insights upfront provides a more fertile grounding for innovation and ultimately increases the chance of delivering breakthrough innovation.
Has your company invested in the right insight foundation to drive successful innovation?
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