Each product that is launched has a story of its origin, telling if its place on the market is a result of pure intuition of a CEO, or ‘hard and reliable’ market research. This also becomes a manner of categorization between the kinds of CEOs.
There is a constant battle between what you think the customer wants (intuition) and what the customer himself voices out (market research). Steve Jobs and Henry Ford support the argument that it is their job to give the customer what they “deserve”. But, the second argument backed by Sam Walton, tends to see them more as consumers, hence making them the voice of focus.
An MIT research study shows that 80% of all product launch decisions by CEOs are made based on their intuition. Another research suggests that products launched into a market have an 80% chance of failure. So, the question – could market research have helped this decision and if yes, how much of the failure rate could it reduce?
Most often, the products launched may not be a completely new line that calls for a fresh marketing campaign. “Better for lower prices”, “more for the same price” and other features are more common and these again, do not require such an exhaustive market research. In this case, it becomes important to understand the distinguishing aspect from other products which becomes the selling point.
When it does come to a new product, not everyone can have the genius level of intuition of Jobs. Thus, while performing market research, it is important to know what questions you want to ask as this will majorly affect the answers you will receive, directly influencing what you make out of the entire research. The way this research is done can be seen in two categories (more broad than precise) – Discovery and Validation. Discovery is the type where you explore qualitatively and try to understand the direct needs of the customer. Validation is more quantitative and goal oriented.
One also needs to take into account that every consumer may hold back or not know. As Henry Ford said, “If I had asked people how they could go faster from point A to point B, they would ask for more horses”.
So whether you are as intuitive as Steve Jobs or not, an appropriate blend of your gut feeling and market research is the best way to go. As the saying goes, “Ask and thou shalt receive”, the answers will depend on the questions you ask in market research.
Authored by Rahul Abhyankar is Director of Programs at Institute of Product Leadership.