Steve Jobs never did any market research, the tale goes. That myth (because here is what he really said) has often been used to support a culture of product innovation from an inside-out perspective. “People don’t know what they want,” is another statement I often hear.
But the truth is that if your market research does not improve your chances of success, it is more likely it was because you were lazy or insufficient in your research approach rather than market research not being helpful.
That might sound harsh, but 95% of product launches fail commercially (Harvard Business School), so I am sorry to say it, but it is not far-fetched.
However, there is a way to implement the outside-in customer-centric approach that we have all been buzzwording about for the past five years.
Let me explain:
Henry Ford famously said “if I had asked the people what they wanted, they would have asked for faster horses”. This is actually a perfect example of a market profiling used to input product development, because - as we all know - Henry Ford gave the people cars which were faster than horses. So even if people do not know exactly what product or service they want - they know their needs. Then it is up to the company translating this into potential innovations.
And that is how market profiling should work: by investigating consumer needs and emerging trends, you should get the insights to develop innovative products and solutions.
First, let’s establish what market profiling is: market profiling is the assessment of consumer needs and aspirations and serves as the background insights for the innovation of new products or services - or a re-design of existing products and services that no longer have a satisfactory performance.
Market profiling can be carried out using a wide range of methodologies like social listening, anthropological observation studies, focus group interviews, qualitative or quantitative surveys. Each approach has its own advantages and disadvantages, so to give you an overview of the trade-off from each, I have plotted them into the matrix below.
What methodology or what combination of methodologies to use always depend on the company in question and what type of product or service they offer. For most global consumer brands, all methodologies are in play, though the prioritization between them differ.
In the following, I dive into how to optimize quantitative surveys for market profiling purposes to deliver the actionable insights that will drive revenue.
It goes for a market profiling as for any type of study; when using quantitative surveys there are two overall methodological questions that need to be answered in the research design phase. Thus, ask yourself:
These are your overall choices that may seem easy but nevertheless they are often done too superficially. The consequence can be a sample that does not meet your representation needs and sometimes that means starting all over again. So do not take them too lightly.
Next, of course, is the questionnaire design.
A good questionnaire for market profiling should follow three principles:
Regardless of what methodology(ies) you chose for your market profiling, the next step is to turn your data into your next commercial success.
To do so, I highly recommend taking a fail-fast approach: collect all the ideas your product innovation team comes up with, sketch them out and test them with consumers before investing significant resources into developing them. I have sketched out a way to approach this in my blog post Getting the next consumer trend right before it’s gone.
With a streamlined setup for this process, your company can work truly consumer-centric in your product innovation and, thus, set yourself up for more successful product and service launches.