The problem with market research

I am part way through reading Herd – How to change mass behaviour by harnessing our true nature by Mark Earls (hats off to JP for the tip) and wanted to pick this piece which shows the limitations of traditional market research.

The central premise of Herd is that our behaviour is much more affected by what other people are doing than we in the west like to think. Moreover the influence of other people on our thoughts and actions often operates at the level of the subconcious. Hence asking people in surveys to predict what they will do or buy in the future makes the mistake of assuming the individual is well equipped to make that analysis – as an individual.

I have long felt uncomfortable with some of the results that market research produces and this goes some way to explaining why. Fortunately, I am not alone. Earls quotes Simon Clift, CMO and Group Vice President of Unilver’s Personal Care Division:

I just don’t believe in predictive research. And we don’t use it.

Earls actually goes further than this to argue that an individual’s analysis of his past actions is also likely to suffer from a bias towards assuming that he decided to make those actions on his own.

I guess that market research has it’s place, at least in the absence of better ideas and for large existing markets, but in startup land I would be very careful. The companies that we back are more often than not operating at the beginning of new markets and the only interesting analysis is to predict demand – and as per the quote from Clift above I’m not sure how often survey or focus group data tells you anything useful.

Instead I would focus on the reasons why people should want your product or service and how you can cost effectively reach them with your messages. If you can answer both those questions you will be off to a great start.

  • Its a good book.

    I don’t know if its there, but there is a great Henry Ford quote re market research which goes something along the lines of that if he’d asked people what they wanted they’d have come back with a carriage with horses that eat less, go faster and make less mess.

  • Its a good book.

    I don’t know if its there, but there is a great Henry Ford quote re market research which goes something along the lines of that if he’d asked people what they wanted they’d have come back with a carriage with horses that eat less, go faster and make less mess.

  • Good post, I’d recommend Herd too. A lot of good thoughts regarding influence; especially in the context of social networks and the struggle with good online advertising (“Interaction is everything”).

  • Good post, I’d recommend Herd too. A lot of good thoughts regarding influence; especially in the context of social networks and the struggle with good online advertising (“Interaction is everything”).

  • This is a topic that often gets talked about, but I think traditional research is becoming increasingly less relevant and useful, particularly with the Internet providing so many ways of really finding out what is important to consumers. Take Dell’s ideastorm, where customers vote for new ideas. There are now real possibilities to involve customers in product development.

    My trouble with the big quantitative research initiatives is that competitors spend the same money, using the same techniques, to sample the same type of demographic, resulting in the same outcomes, which ultimately they react to in the same way!!! So we end up with a common “greyness”, with no originality or distinction.

    The following video gives a nice view of the benefits of focus groups:-

    http://www.youtube.com/watch?v=ku4Ugw0lQ4Q

  • This is a topic that often gets talked about, but I think traditional research is becoming increasingly less relevant and useful, particularly with the Internet providing so many ways of really finding out what is important to consumers. Take Dell’s ideastorm, where customers vote for new ideas. There are now real possibilities to involve customers in product development.

    My trouble with the big quantitative research initiatives is that competitors spend the same money, using the same techniques, to sample the same type of demographic, resulting in the same outcomes, which ultimately they react to in the same way!!! So we end up with a common “greyness”, with no originality or distinction.

    The following video gives a nice view of the benefits of focus groups:-

    http://www.youtube.com/watch?v=ku4Ugw0lQ4Q

  • That’s the problem with Market Research into “intent”. people don’t always know how or why they act in particular ways. Some interesting analogies in how people pick their life-partners 🙂

  • That’s the problem with Market Research into “intent”. people don’t always know how or why they act in particular ways. Some interesting analogies in how people pick their life-partners 🙂

  • I’ve always argued that there are three aspects to product research: what people want, what people need, what people will buy”. Market research tells you what people THINK they want.

    It is a useful tool for sourcing information that can _guide_ what a business does. However, human behavior always need at least some sort interpretation to understand it – we are pretty complex ‘simple’ creatures. That expertise is in short supply.

    Psychologists have had it for a long time and Earls’ book does a good job of setting that in an economic and social context. Will be interested to know what you think of it when you get to the end…

  • I’ve always argued that there are three aspects to product research: what people want, what people need, what people will buy”. Market research tells you what people THINK they want.

    It is a useful tool for sourcing information that can _guide_ what a business does. However, human behavior always need at least some sort interpretation to understand it – we are pretty complex ‘simple’ creatures. That expertise is in short supply.

    Psychologists have had it for a long time and Earls’ book does a good job of setting that in an economic and social context. Will be interested to know what you think of it when you get to the end…

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