Ignorance isn’t always bliss

By Farooq Hasan When you launch a new product or a new company, market research is essential. You ignore market research at your own peril. The market research industry is small but vital for the survival of larger corporations. Pakistan has a host of market research companies, but the leader is Nielsen. IPSOS – a French company – has been a recent entrant. Domestic Research Bureau, owned by Unilever, has been operating since the 60s. It has now integrated into the main company. The overall scenario in Pakistan looks good for two reasons: 1. As competition intensifies, companies (multinationals and local) turn to research agencies for advice, guidance, data and market intelligence. 2. The local companies are now staffed by graduates of business schools. They tend to use market research as an integral business tool. A fully integrated market research company should be able to provide a range of services, including insight, market intelligence, advanced analytical tools and integrated marketing solutions. For instance, Nielsen reached 82 percent of the world’s population and has 10,000 clients. A good research company should be able to provide data in the following realms: usage and attitude, segmentation, promotion and effectiveness, concept and usage, sales forecasting, tracking, pricing research, product tests, customer and employee satisfaction, mystery shopping, advertising research, etc. The methodologies for quantitative and qualitative research are highly sensitive and cannot be left to the layman. On the quantitative side, you have the face-to-face interviews, business-to-business interviews and mystery shopping. On the qualitative side, there is the focus group, observation, ethnography and in-depth interviews. Each of these is a highly professional task, best left to the research agency. There have been some major failures of market research, both internationally and locally. A few years ago, a Swiss multinational launched a brand of iced tea in Pakistan. The product flopped. Even my granddaughter knows that in the Subcontinent, tea is associated with warmth, milk and sugar. The consumer likes to hold a warm cup of tea in their hand. Many years ago, a multinational corporation in Pakistan launched a brand of masalas. They were beaten by a local company that had a major market share. The concept was right but the strategy was wrong. Internationally, there a two text Book cases of ignoring Market research: New Coke: Coke is the ultimate brand. It is the most expensive brand in the world, worth $72 billion. Coke is the ‘real thing’. Yet in 1985, Coca-Cola terminated Coco-Cola Classic and launched New Coke. They based their marketing strategy on findings that Pepsi was overtaking Coke because of the consumers’ preference for sugary taste. Yet, basic market research showed that consumers were loyal to Coco-Cola Classic. The launch of New Coke was a disaster and had to be rolled back. The lesson learnt was: concentrate on brands perception; don’t clone your rivals and don’t be scared to take a u-turn. Ford Edsel: Among many marketing professionals the story of Edsel car is considered the classic brand and research failure of all time. In 1957, the Ford motor company launched Edsel, the most advanced motor car of its time. It was a complete flop. Even the name was a failure. The name had been chosen from a list of 10,000 names. The car was 10 years ahead of its time. The writer is the former executive director of MAP