Mindscape Communications New Answers for New Times™


"If We Build it…" Well, not quite...

In my last post (which has been awhile, granted), I took up the subject of marketing research. I briefly outlined its importance to every business and organization. I described the different types of research, and alluded to the benefits of approaching research strategically, i.e., planning. Please refer to that prior blog entry if you care to catch up on my overview.

Today, I want to offer you an example of what can happen if marketing research isn't integrated into the product or service planning process early on. This is a true story with which I have firsthand experience.

This particular company had likely invested hundreds of millions of dollars designing and manufacturing the latest equipment for its market. It had produced hundreds of these expensive units, thinking that the company's likely customers would be clamoring for all the latest bells and whistles it had incorporated into this state-of-the-art equipment. Yet, all these units were sitting on the factory lot not selling. Executives were getting nervous. They had staked much of the company's capital -- and perhaps their own careers -- on this new equipment.

Why weren't these things selling, they wanted to know? The attitude was pretty much that these should be selling themselves…the "If we build it they will come" syndrome. It was a fairly quick assessment on our part: they didn't really have a good picture of who the primary market for this type of equipment was. A general idea, yes. Specifically? No. The general picture of their market had served them pretty well over the years. But that led to complacency, as did a budget that could obscure real issues. As a result, the company bet a bundle on that general picture of its market, coupled it with individual and corporate hubris…and lost.

Prior to designing and manufacturing this equipment, crafting a solid marketing research plan -- with clearly-defined goals -- and conducting a bit of secondary research would have discovered that the primary market for these products was essentially restricted to a very small segment of the overall market that was overwhelmingly located in one geographical area of North America. By knowing the size and location of that market, the company could have saved millions of dollars on manufacturing and carrying costs, lost opportunity costs, marketing expenses, and more. Couple that with some primary research to learn about acceptable price points, delivery options, preferred features and more, and you can imagine how much more successful this company could have been with this product launch.

Yes, they may have had the best piece of equipment out there. But they overbuilt for the actual market potential and ultimately struggled in their product launch. Ouch. Big-time ouch.

Further, there was really little we could offer them at this point other than the information we uncovered. That was information they needed at the start, not at the end. Things could have unfolded so much differently if only they had thought strategically and valued the role that marketing research can play in the product planning and development process, not just in the post-production sales phase.

This is a scenario I've seen repeated over and over during my career: manufacture "X" -- or create a new program or service -- and then figure out who to sell it to and how. It doesn't matter the size of the company or organization, or their line of business; it's a common problem. Doing things backwards, however, is not a very cost-effective approach, whatever one's line of business.

When you're ready to see what strategic marketing research -- and strategic marketing -- can do for you, give us a call. But please, do us both a favor: communicate early in the process…not after the die is already cast.

-- GSM


Research? Who Needs Research?

Interesting question: who needs market research? If you think about it, that question in itself is research, isn't it? Who does need research? The answer is: pretty much every business and organization that wants to survive…and thrive.

How can you know how to best serve your particular market or customer base if you don't know who they are, what they want, how much they are willing to pay, the best means for communicating with them, and so on?

It's easy to get scared off when the subject of market research comes up, particularly if there is no one within your company or organization who is tasked with that responsibility or who has some level of experience with what it entails. It needn't be overwhelming, though.

For starters, the Internet brings so much information to us today that what you are looking for, or at least some semblance of what you are looking for, is probably already out there. Somewhere. The trick becomes finding it. Or, if you aren't able to find exactly what you want, finding something close and extrapolating from it. This is known as secondary research. And, yes, sometimes those of us who are perhaps a bit more skilled at searches can expedite the process and find information for you faster than those who don't spend all their time studying search engine optimization, search phrases and expressions, etc. Yes,
Mindscape, is well-versed in conducting secondary research.

Sometimes, however, you can't find exactly what you need merely by searching for what others have already done. Sometimes you need to do your own research based upon your own information-gathering goals. That's when primary research is called for.

If you don't have an in-house research department, you may wish to consult with an organization such as
Mindscape to help you define the information you need, develop your information-gathering goals, and create the research plan and methodology…as well as then conduct the research itself through focus groups, surveys, personal interviews, etc. There are many tools and techniques available for primary research. It will benefit you in the long run to use a qualified researcher to help you get the information you need. A relatively small investment up front can often save you a lot of expense later on. Consider the costs of a failed product or service launch, or misdirected advertising messages, for example. You can ensure that those larger investments have a better chance of paying off by making a smaller and targeted research investment at the start of things.

There's certainly more that can be said on this subject, and perhaps I'll take it up again. But this hopefully is a sufficient overview to get you thinking. Do you need research as part of your ongoing marketing and communications efforts? When you have your answer -- and you need the expertise of an outside consultant to help you -- give us a call.

-- GSM