Market research indicated that consumers would never buy sony’s Walkman cassette player that didn’t have the capacity to record and users would be irritated by the use of earphones. The Walkman went on to sell 330 million units.
When Eureka Forbes launched its first vacuum cleaner in 1982, they hired a consultant to analyse the market for vacuum cleaners. After few days, the consultant submitted a report asking the company to shut shop, as no one will buy a Rs.3000 vacuum cleaner when brooms are available for Rs.3 apiece.
Pepsi was the preferred drink in all the blind tests and they exploited this research output by communicating over mass media. They could not increase their market shares.
After 10 years of research, 4 years of development, spending 250 million USD and year-long promotional teasers, Ford Launched “Edsel” car with much fanfare and the car was a spectacular flop, became a Failure Case Study.
The reasons why a market research fails are innumerable. Chief among them is the lack of “Empathy” and proper “Observational Research”. Let us look at other reasons why market research fails?
WRONG CONTEXT, WRONG RESEARCH METHOD
PEPSI, COKE and SIP TEST — In 1980s Pepsi ran a commercial “Pepsi Challenge” asking people to take “Blind Taste Sip Tests” — The results were astonishing — Many people preferred Pepsi than Coke. Pepsi exploited this results in their commercials. Coke though disputed Pepsi’s results, ran their own blind tests and was shocked to know that the results were same. Coke, went ahead, changed the secret formula, conducted more tests, got a lot of positive response from focus group tests and launched “New Coke”. There was outrage, massive protests for the “New Coke” and customers forced Coca-cola to bring the old coke. Why did “New Coke” fail? What was the problem with Sip Test?
Testers did not drink the entire can. They just took a sip, whereas normal customers drink a whole can. Users may prefer to drink a can of cola in their home, sitting and watching some sports game. People behave differently in their natural context than an artificial context. Tests were not conducted with the subjects in a natural environment.
In Sip tests, consumers will like the sweeter product and they would rate it high. Pepsi was sweeter than Coke. If you drink the whole can of Pepsi, the sweetness would be overpowering. So, Pepsi was designed to shine in Sip tests. Pepsi had citrusy flavour burst, which would dissipate over the course of the can.
Coca-Cola meant to be refreshing liquid — so less sweet — raisins vanilla flavour would remain over the course of the whole can, providing consistent taste. A normal user will not blindly buy a cola — The tests missed out the user’s associations, memories with the brand. The brand plays a major role. Pepsi even with those blind tests results could not become a market leader.
WRONG TARGET SEGMENT, FACT ONLY BASED RESEARCH
MAXWELL’S COFFEE HOUSE — In 1950s America was a nation hooked on coffee. Due to rising prices of Arabica Coffee Beans and their vulnerability to bad weather conditions, Maxwell Coffee House saw Robusta coffee seeds(Tastes poor) as a possible option, which is reliable, cheaper and they were plentiful. They decided to add a few robusta beans to existing coffee blend and ran sensory tests with their existing customers. The consumers tasted both maxwell’s coffee blend and Robusta mixed coffee. Nobody could find a difference. The company went ahead and launched the blend.
As time went by, to remain competitive, every year Maxwell continued to increase the Robusta level in the coffee blend and before launching, they did run sensory tests. Every time, consumers failed to tell the difference between the slightly increased levels of Robusta and the previous blend.
This fact-based approach helped Maxwell Coffee House to sell coffee and retain customers for some time. Sales boomed, Profits were healthy. Slowly, sales declined, though tests show long time coffee drinkers were happy with the product.
The problem was — Maxwell Coffee House was not attracting new generations of customers. A small addition of Robusta each year added up a lot of Robusta in the latest blends. If a consumer had been drinking coffee for years, and the change was subtle every time, he or she would feel the taste tolerable. Young people when they drank coffee with so much Robusta felt the bitterness and unpleasant. Their existing customers were comparing new blend with previous taste, whereas new customers or youngsters had a different benchmark.
NEW CATEGORY PRODUCT AND CONSUMER NEEDS EDUCATION
HERMAN MILLER”S AERON CHAIR — Designers Bill Stumpf and Chadwick spent a lot of time in observing people working in offices and understood that the new chair should solve health problems(Back, neck, spinal), help them to perform various tasks — To provide the best comfort, simplify their life.
The Aeron Chair was a radical design — Highly engineered for ergonomic comfort — Posture-fit mechanism to help users to sit in various postures to do the particular task, easy to access, easy to use mechanisms without getting up from chair, mechanism to avoid back pain, to avoid shirt coming out of Pant, Stretchable thin soft material to avoid back sores.
When Herman Miller showed the Aeron Product to few focus groups for review — The results were shocking. People felt it was ugly. The product was called “The chair of Death”. Facility managers and Ergonomic experts told that it was impossible to sell the “Aeron Chair” to corporate clients. Many suggested covering the chair with foam. But Herman Miller team went ahead, launched the product and it was a huge success. Why did market research showed that product would fail?
When users saw the product first time, they told they hated the product and it was ugly. We need to understand that this product was an unusual product and they had not seen anything like earlier. We need to understand the “Familiarity Bias” psychology of consumers. Their hate was misinterpreted — They might have meant that the product was unusual, which they were not used to it.
When consumers were asked to sit in chair and experience, they gave bad ratings initially — The reason — When consumers spend less time with the product, they get little experience which would not sufficient to judge the product. When Herman Miller asked people to use the product for a couple of days in their office, the results were overwhelming. Usage in the context, for a longer period — consumers were amazed at the experience of comfort and usability.
Regarding the chair’s aesthetics — Consumers were used to chairs with softer, thicker foam covered with fabric, cushioned, upholstered — Their existing mental models on aesthetics were different from what they saw in Aeron Chair. How could we value their response, when they were not familiar with the new design language?
References — Wired to Care by Dev Patnaik, Blink by Malcolm Gladwell, Designing for Growth by Tim Ogilvie and Jeanne Liedtka, Ford Edsel Wikipedia, Richard Feloni-Businessinsider.com, Unconscious Branding by Douglas Van Praet