Some Comments on Market Research

Need to be careful of management's demand for quantification of opportunities. Usually market research is done in the resource allocation process to quantify the size of the opportunities, not to understand customers nor how markets work. This quantifying focus incorrectly assumes that the customer's world is structured in the same way that the data is aggregated, under headings of products, customers and organisational units, ie how it is sold, how profitable each is, which customers are buying which products/service, and what costs and revenues are associated with servicing each customer or business unit. This incorrect market segmentation causes managers to aim at phantom targets. For example, framing markets in terms of customer demographics, eg averaging across several different jobs-to-be-done, or outcomes that customers are seeking, that arise in customers' lives inevitably produces a one-size-fits-all product that rarely leaves the customers satisfied. Furthermore, defining markets in terms of an organisation's boundaries further restricts innovation from developing products/services that will truly help the customers execute the jobs-to-be-done or provide outcomes that they are seeking.

"...the solution is not to use data that is collected for historical performance measurement purposes in the processes of new-product development. Keep such data quarantined: they are the wrong data for the job. The size and nature of job-based or circumstance-based market categories actually can be quantified, but this entails a different research process and statistical methodology..."

Clayton Christensen et al, 2003

Recent evidence is suggesting it is better to target a certain personality group rather than a particular demographic/socioeconomic group. Psychometric tests, such as Myers-Brigg, can be useful in defining personality types. For example, in selling Weet Bix

- the thinking/logical personality will respond to the product as a healthy choice, ie make decisions based on facts and relationships

- the feeling/emotional types will respond on the basis of their association (positive or negative) when fed Weet Bix in childhood, ie relies on experience and actions as a basis for the evaluation and will judge a product in terms of its benefits from their own emotional perspective

- material/physical types will respond based on the experience of the taste and pleasure from eating Weet Bix, ie they value physical comforts and pleasures, material possessions and achievements

- intuitive/imaginative types will decide by using their heightened sense of perception and intuition based on the product's appearance, ie they have a strong tendency to visualize experiences

 

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