Market Research–Fact or Fooey

© Steve Pinkston

Much has been written and said about market research. Does it help? Is it a waste? Does it actually hurt our industry?

There are those out there that depend heavily on market research. They won’t make a move unless a panel of consumers has sat in judgment on their new product. Only after a panel of six to eight “average” American housewives sitting in a windowless room decorated only by a wall-sized mirror (gee...I wonder if anyone is watching) have perused their latest offering and given it thumbs up, are they confident to go to market. Hundreds of thousands of dollars are spent annually for the sole intent and purpose of killing any idea that can’t pass this acid test.

The problem as I see it is that marketing is not a science. If it were, we would be able to perform a function and expect a specific result. After all, in science, for every action there is an opposite reaction. If you cool water to below 32° F, you can be pretty well assured that it will start to freeze. They’ve even made a science of chaos related studies that searches for pure randomness for the sole purpose of making chaos predictable.

Well, if scientists want chaos, they might want to try their hand at marketing. The point is, there is little in our field that is predictable. That panel of ladies sitting in their controlled environment making decisions about products they may or may not have an interest in can easily change their mind the minute they leave the room. Standing in a supermarket with product X surrounded by the competition and she knowing that the only thing weighing her decision is the health of the family and the health of her budget, might very well not make the same decision that she said she would make when she was in the mirrored room. I contend that she is probably more inclined not to make the same decision because the situation is so different. In the grocery isle, she doesn’t feel the pressure of knowing that the life or death of a potential product rests, in part, on her decision.

Although the discussion to this point has been consumer, the same thing goes on in the B to B world. The engineer, company president, scientist or doctor, when asked the same sort of questions in a controlled environment, knowing that the fate of a product rests, again, in part, on his/her input, might surely give a different answer than he/she would if their own company’s best interest were at stake. The point being, the focus is quite different. The focus group is focused improperly. It’s the (pre repair) Hubble Telescope of marketing.

Then we need to ask the question—why do we have focus groups and why do people rely so heavily on them? The simple answer is that to a large extent, they work. It all boils down to the fact that when people are asked their opinion, they try to be as objective possible. My guess is that it works a lot like a jury that has been exposed to pre-trial publicity but can still make an unbiased decision. But the question still remains, do we have the whole truth and nothing but the truth? In either case, probably not. Hopefully, in the jury example, the ones with the whole truth can convince the ones with the partial truth what the whole truth is. Unfortunately, in focus groups, no such forum exists.

So, how do we draw a bead on our quarry if the data in focus groups is not 100% reliable? The answer is, in two words, intuitive creativity. Now before all you believers in the holy grail of data bust a gut laughing, just hear me out. I’m not talking about blue sky, whatever comes to mind first intuition here. What I’m talking here is facts oriented creativity. Define your market and your audiences within that market. Define how your product is sold and your typical final decision maker. Get into his/her head. Find out what turns them on and what turns them off. Find out how many people have input in the purchasing decision and build a program around that information. And yes, if you can afford it, conduct a focus group and use that information.

A while back, I worked with a prominent manufacturer of children’s activity materials in developing potential new products. Every year, over a hundred new possibilities were run through the focus group mill with only two or three surviving to bask in the warm fluorescent glow of store shelves. Hundreds of thousands of dollars were spent on this activity. But the real tragedy was that some very good ideas were killed because they did not get a favorable review by the obligatory panel of homemakers. By contrast, I also know of another company (in direct competition with the first company) that brings literally every viable product but in smaller quantities, therefore holding down the risk.

The point is, the focus group is not essential to developing a successful marketing program, but it can be extremely valuable. Markets are at best, moving targets. If you take aim at information obtained in structured, information gathering processes, there is a good chance that your shot will fall behind your target. The best offense is knowing your audience as intimately as possibly and using your good judgment to develop your program. Remember, marketing is not a science. There is no cause and effect that is 100% reliable. Every program has risk involved–some of the best are extremely risky. But if that risk is calculated, then the rewards will be worth the gamble.

Keep in mind that market research measures only perceptions and historical data. Marketing takes place in the future.