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Why market research is a sheer waste of time?

Dr Vikram Venkateswaran — Tue, 13 Dec 2011 15:43:38 +0000

Market research is one of the activities that most brands indulge in regularly. But more often than not it has been proven that is a waste of time.

Now most of you reading this would be finding it difficult to believe above statement, after all brands spend Crores of rupees in this activity. All business schools teach us that this is the most important activity that precedes any market launch. But just hear me out before you dismiss this statement out right.

Market research was firmly established in the early part of the 20^th century as an important activity. This was further fuelled by the belief that most brands can capture the felt and latent needs and wants of its consumers. This activity is again divided into qualitative events like focus groups or interviews and quantitative techniques like questionnaires.

The net result was a result based on which the brand managers would develop the 4Ps – product, price, place and promotion for the service or product before positioning it to the consumers. But most of this activity is a sheer exercise in justifying a promotion that the brand has about the market segment and does not have enough evidence to guarantee the success of a launch.

A good case in point was the launch of new Coke. Post World War II Coke had almost 65% share of the aerated beverages market in North America. But by 1980’s it had fallen to 24%. This was mostly due to the launch of the Cola wars by then Pepsi president John Scully, who introduced a series of blind taste tests that proved that most consumers preferred Pepsi for taste if the brand name was not disclosed. The tests were even televised and by 1980 the results were causing considerable alarm in the Coco-Cola headquarters in Atlanta.

So the CEO Robert Goizueta launched the vision of new Coke, a new formula which was field -tested and backed by market research. It had an acceptance rate of almost 70% and only 10 % of respondents felt disappointed with the new taste. But when launched on April 23, 1983 it was a disaster. Most loyal Coke drinkers formed associations to ban the new drink and Coke market share fell further.

Finally Coco-cola relented and brought the old Coke back. It cost them Billions of dollars and some very angry consumers.

The market research did them in and Coke took some time to come back to level terms.

There are countless examples like this when Market research has actually harmed the company more than it benefitted them.

On the other end of the spectrum there are companies like Apple which do not rely on market research at all. Steve Jobs in fact abhorred market research and relied on his personal knowledge and intuition. What he famously said was – The consumers do not understand what they want or what is a “great product”, they come to know it when you give it to them!

Similarly no sane market research specialist would have advised Larry Page or Sergei Brin to launch yet another search engine when Yahoo was the going great gins. Also, Mark Zuckerberg may have never launched Facebook if he relied on market research.

So how does one go about launching new products or services if one has to completely do away with market research? Well the answer is not so simple but a good place to start is the sales data.

Sales data both from competing and substitute, products and services are a great place to start to get inputs into your own product development. Many great marketers have stressed on the need to be in the field and observe the consumer buying behavior at the point of sale. The issues and concerns of the consumer form a good insight into a product development, like for example storage of songs was an important input into the iPod.

Secondly product packaging and design would form the second key component. This again cannot be ascertained from field tests of focus groups but one has to just look at the packaging of Tobacco products to understand how something so deadly can be beautifully packaged to look attractive. A good example in India is the ITC soap brand Fiama Di Wills.

Thirdly sales training to ensure that they communicate the right message which was the input from the design. This could be from the sales data, point of sales experience or the design of the product.

All these three require considerable effort and are not for every firm, but only those with the right investment in sales, marketing and design. For the rest there is always the luxury of stale market research.

Would love to hear your views on this!

How to Spot Fake Customer Reviews on the Internet!

Kaushambi — Tue, 20 Sep 2011 10:07:00 +0000

Even though many customers these days know that product reviews online come with a high risk of being absolutely fake and paid, the impact of good or bad reviews still doesn’t cease to be. It doesn’t take a second to be swayed by reading about an exotic hotel or the durability of a laptop.

Consumers buying products based on online reviews has been a growing trend over past few years. However, before you start swiping your credit card, we caution you to these measures by which you can easily spot a fake product review.

Snapshot of ad for writing fake reviews

Note the use of Perfect Language

It’s but natural that if you are reviewing a product as a genuine customer, then you really wouldn’t care much about typos or grammatical structure. You’d probably write a few casual lines saying "I liked this product when it arrived at my doorstep. No late shipping and great packaging" or some such.

But if you notice an introduction line, a proper conclusion and an ending with a pitch of a recommendation, then it’s most likely to be a fake review.

Another tell tale sign of a sales pitch in fake product review is that it will typically list out only the advantages of the product and will defend any disadvantages that other users may have pointed out.

Note the Strategic use of Keywords

We live in the Keyword Age. No text sells without being keyword rich. Product reviewers are paid to inject strategic keywords in a text. If you see phrases like "Buy this product online today" or "I highly recommend this product. Wait no more and buy it online today" or "Best details about the product available here", you can be rest assured that it’s a fake review.

If you see customers writing the entire product serial number, then that too, is a major tell tale sign of a paid review. An average user would never write "I loved this laptop series number FPN003287. It has more features than the previous one in the range No. AHUR5836".

Note the replication on Google

Many fake product reviews are written very subtly and smartly which don’t make them easily recognizable. If you even have a whiff that a certain review is fake and want to make a cross check on the same, pick out a line from the review and do a Google search on it.

In many cases, paid and promotional fake reviews are copied in many websites under different usernames. If Google throws up multiple search results, you will immediately know if the review is fake or not.

Note the Review Date

Has a new product just hit the market and elaborate reviews have started pouring in? How do you think that’s possible? Believe it or not, reviewers are paid to submit their review within the first two days so that the sellers can start generating positivity about the product as soon as it hits the market.

If you see a review being posted in a day’s time after the product launch or listing, make sure you don’t believe it too quickly.

Note links at the end of the review

All fake product reviews may or may not have this, but you be warned of this tell tale sign of spotting a fake review. If you notice connecting links to the seller’s homepage or to the blogger’s personal page, it’s an immediate giveaway that that the seller or reviewer is trying to promote his/her own page or product through the review. A genuine reviewer may add his/her own signature web URL, but never a long hyperlink.

Online product reviews, just like movie reviews, have become extremely unreliable. A middle path would be to avoid the exaggerated 5 start reviews and skim through the ones with 2 or 3 stars so that you get a fair overview about what the advantages and disadvantages of a product really are.

Any other points you can think of on how one can spot a fake online product review ?

The Real Grass-roots Innovation by Indian wins Best Product Design!

Arun Prabhudesai — Wed, 03 Aug 2011 08:56:00 +0000

When I saw this low-cost low-tech simple yet extremely useful Product design – I was quite amazed as to why have we not seen it as yet. It would have saved back aches of thousands, if not millions of people who carry / push load on daily basis.

In a contest arranged by Core77, the product – Load Carrier for Labor – designed & created by Vikram Dinubhai Panchal of The National Institute of Design (NID), Ahmedabad won in the product / equipment category!

This winning product was made at a miniscule cost of Rs. 300 and has potential to affect lives of millions of people across the globe. “Load carrier for labor” project aims to improve the working condition of labourers and workers at many places globally like construction site, factories, ports, railway stations, etc The objective is to prevent various occupational hazards and demonstrating Product design and ergonomic consideration in welfare of human life.

Load Carrier for Labourer Pictures

[A push cart as well as a backpack which can pick-up heavy loads]

[To carry Loads overhead with ease]

[and a pushcart as well...]

Won’t this Rs. 300 product be a dream come true for labourers who carry heavy loads day-in and day-out. This is the Real grass-roots innovation!

You can check out the details of this product by visiting their product page.

Tata Nano promises India’s most fuel efficient Diesel car at 40 km/litre!

Viral Dholakia — Sat, 30 Apr 2011 08:09:23 +0000

Designing a new product based on certain standards and launching it successfully are altogether two different aspects to be taken care of in a new product offering. This is where most of the new products, especially engineering products, falter and need rectification of error on constant basis.

Needless to say, Ratan Tata’s new engineering dream to see every Indian owning a car which is low on fuel consumption, hit a similar roadblock with a spate of electrical fires, faulty wiring and manufacturing defects even after adhering to strict safety norms and crash tests.

Well, that’s about its past. Now, that the technical defects are resolved; all attention shifts to mileage and fuel efficiency of the petit car. Even reports suggest that Tata Motors is planning to launch a diesel version of Nano which targets a higher mileage of 40 km/litre, rendering it as most fuel efficient car in India.

What’s more? This shall also fulfill Ratan Tata’s vision to shift masses away from bikes and upgrade to cars, with its new diesel variant expected to match the mileage of a typical 180cc motorcycle. The running cost of Re.1 for a kilometer of a car drive is something which none of us could have even dreamt about.

Now that the Nano has been positioned against 2-wheelers, it goes without saying that the competition revolves around the crucial ‘mileage’ factor and fuel economy of the car, which influences an Indian consumer the most. Nano’s petrol version gives an average of about 22 km/litre (in cities) but can go upto 26 km/litre on highway.

The Nano Diesel is expected to run on two-cylinder, 700cc engine without compromising on fuel economy; and being complaint with BS IV emission standards which regulate pollutants released by automobiles.

Nano is the largest-selling Tata model in India with its sales figures reaching 2,56,202 cars, 27% more than the previous year; coming on the back of prompt business recovery strategy led by increased promotional efforts, additional tie-ups with finance institutions to facilitate fast-track loans to borrowers, new comprehensive maintenance contract at just Rs.99 for all new buyers of the car and an extended warranty on Nano to 4 years or 60,000 kms, which ever is earlier, at no extra cost.

At 40 km/litre mileage… I guess, most of the Nano detractors might have to eat their words, if safety aspect is taken care of by Tata Motors. What say?

AMAZON.com: The strongest BRAND of all!

Arun Prabhudesai — Fri, 25 Mar 2011 12:22:15 +0000

So what comes to your mind when someone says BRAND VALUE??? According to Millward Brown "Value-D" ranking based on surveys of 150,000 consumers in 24 countries; AMAZON.com, founded by Jeff Bezos in 1994 has emerged as the strongest brand globally & in the U.S.

Amazon is recognized as the strongest brand globally as measured by how consumers perceive value vs. the associated costs. It’s the first time the unit of WPP’s Kantar Group has released the value-based ranking of brand strength in the Millward Brown’s research report.

The list of winners in the rankings primarily includes brands based on the Desire-Price relationship (known as value-D score). Value D score was developed by WPP’s Millward Brown and is based on BrandZ, the world’s most comprehensive and reliable collection of brand equity information available. Created 13 years ago, BrandZ contains data from more than one million consumers in 30 countries. Globally, Amazon is followed by Colgate, Nokia, Pampers & others as shown in the chart.

The report emphasizes that Price alone is not rather brand has increased in importance relative to other purchase drivers such as price, location, convenience and habit. On average worldwide,

only 7 percent of consumers buy on price alone, down from 20 percent ten years ago. On the other hand, 81 percent regard brand as an important purchase driver. The study is designed to be a practical and relevant tool for sharpening customer’s perception and improving profitability.

The irony is that tech giants like Apple and Google didn’t make the cut, but Nokia did. The basic reason may be people find Apple too expensive & Google on contrary provides services for free so cannot be measured on the price angle.

On that same pricing spectrum, while Starbucks and other premium coffee brands might be more desirable overall, Nescafe globally and Folgers in the U.S. make the top 10 on price perception.

Value-D measures the gap between the consumer’s Desire for a brand and the perception of the brand’s Price. By quantifying this gap, Value-D helps brands optimize their sales, profit and market positioning potential. Since the score essentially measures the gap between what consumers think the brand is worth and how they think it’s priced, the higher the score, the greater the potential & flexibility for raising prices and boosting profits.

Tata Pixel: High-end replica for a low-cost Nano Europa!

Viral Dholakia — Fri, 04 Mar 2011 08:20:21 +0000

It was christened as dawn of a new era aided by superior technology and engineering efforts. Ratan Tata surprised the automotive industry in 2009 when he introduced the Tata Nano, the 1 Lakh Rupee Car, in front of the world. It was an epic moment.

But, now that the Tata Motors have come out with the concept of its new Nano Europa model – the Tata Pixel - for the selected overseas markets; questions are being raised whether Tatas could abide by its lucrative $2500 price tag for the dream car in the foreign markets.

On Tuesday, Tata unveiled its upscale city car concept based on Nano model in this year’s Geneva Motor show, for the European markets. This futuristic Tata Pixel, which is powered by 1.2-litre turbocharged diesel engine, comes bundled with high tech features like optimized aerodynamic drag, low rolling-resistance tyres, stop-start technology and intelligent battery charging.

When the ‘Scissor’ doors of this four-seater car rotates upwards to allow passengers in, its exterior-look aided by innovative diamond-shaped door system gives imagery feeling of an angel with the wings spread all around.

The 3-metre long Pixel also boasts of the ‘Zero Turn’ drive feature – which enables manoeuvrability and parking of the vehicle in the tightest of spaces through rotation of the outer wheel forwards and inner rear wheel backwards during low-speed manoeuvres, while the front wheel turns at acute angles.

This fresh city car concept also comes with integrated human-machine interface concept from Tatas Motors for its new generation programs. What’s more? Europeans will also be able to seamlessly integrate the vehicle’s key controlling functions through their Smartphone or a Tablet.

Without any doubt, such high-end features can not be satiated at a paltry $2500 tag. In fact, it can not be done even at double the cost of $5000. So, ultimately, the cheapest car won’t be the cheapest for the Europeans; but a high-end replica for a low-cost Nano.

What according to you could be the price-tag of this petit Europeanized car?

Will 2011 be the Year of Luxury Brands?

Sriparna Neogi — Mon, 07 Feb 2011 10:27:33 +0000

If the recent foray of premium luxury brands into Indian retail sector is any guide, then the average Indian, after shunning foreign luxury brands for decades and sticking loyally to home-grown products, is finally warming up to luxury brands.

The luxury market has picked up quite a pace; according to A.T. Kearney, the global management consulting firm, it is expected to reach about $14.72 billion by 2015 end and then double to $30 billion by 2015. Although high end or midrange luxury items often come with an extremely hefty price tag, one can not ignore its master craftsmanship or its assured quality.

Lured by the India’s growth rate of 8%- 9%, international luxury brands of repute are flocking to India, to be a part of the Great Indian Growth Story. Starting from last year, the second half of it saw the entry of L’Occitane, the French cosmetics and fragrance company, into Indian spa industry in partnership with Devi Spa, Udaipur. This premier cosmetics company which started its operations in New Delhi last year now plans to expand its base by opening stores at upcoming towns and cities across the country. Touted as an affordable luxury brand, L’Occitane is affordable luxury indeed.

Giving this brand stiff competition will be another French cosmetic giant L’Oreal, which already has its own fan base among Indian women, and other home-grown ayurvedic brands like Shahnaz Husain, Blossom Kocchar, to name a few.

Not to be outdone by the French, the Italians are here, with the exotic Italian home furnishings brand Ipe Cavalli (not to be confused with the Italian fashion designer Roberto Cavalli), famous for manufacturing breathtakingly beautiful high-end furniture, announcing its foray into the décor segment. The first store will be launched in partnership with International Furniture brands (IFBrands), a retail chain for luxury home products. Out of the five Ipe Cavalli brands – Visionnaire, Streadlined, Contemporary Classics, Antica Tapezzeria Ducale, and CasaNova – the first collection to come to India will be Visionnaire.

Another Italian furniture brand which will bring world class furniture to India is Giorgetti. While Ipe Cavalli specializes in mainly baroque style of furnishing, Giorgetti is the ultimate contemporary design furniture. The brand recently opened its first standalone showroom in Mumbai.

For automobile enthusiasts, things have probably never looked this good. Ferrari, the iconic Italian sports car maker, is all set to grace the Indian automotive sector in April, this year. The company has reportedly tied up with Shreyans Motors to distribute its high-end luxury cars at showrooms in Mumbai and New Delhi.

The Ferrari models available at the showrooms will be Ferrari California, 458 Italia, the 599 GTB and the 612 Scaglietti models along with the brand merchandise.

Close on the heels of the Italians, come the Swedes, with the supercar Koenigsegg Agera, the newest offering from the Koenigsegg stable, set to make a grand debut on Indian roads some time next month. Even Mercedes Benz, a long-time player in Indian luxury car segment, has sought to re-launch the Maybach. Priced at a mind-boggling INR51 million, this is one car you can not afford unless, of course, your name happens to be on the Forbes List of 40 Richest Indians.

In spite of the recent spurt of growth, luxury market in India is still in a nascent stage and a decade or more will pass before luxury brands are fully accepted by the generally frugal Indians.

Moreover, finding a proper foothold in the Indian retail space, already saturated with modestly-priced, indigenous products, can prove to be a Herculean task for these premium product companies.

Will India indulge? What do you say?

Soon, Puneites can buy Milk from ATMs

Viral Dholakia — Sat, 22 Jan 2011 10:11:07 +0000

“Suno, ghar aate samay machine se ek litre doodh aur pau-kilo paneer le aana.” Yes, brace up for such requests from your better-half if you’re one of those Puneites.

Pune might soon see its IT professionals walking all the way to ATM during odd hours. No, I am not talking about ATMs which cough-up crisp Rs.100 notes; but an ATM which serve as Any Time Milk (ATM) vending machine.

You just need to keep one more plastic card in your wallet and buy fresh milk from ATMs to be installed by a milk co-operative – Pune Zilla Sahakari Dudh Utpadak Sangh or Katraj Dairy. That’s it!

Pune, the city of IT hub, is likely to come up with ATM machines for a whole range of milk products, to serve those working class populations which are bound by erratic work schedules and remain deprived of calcium-rich foods.

This concept of ATM is quite popular in western countries and is readily available at common hot spots. However, in India, this trend of vending machines for packaged milk products is still to pick up – what with a majority of Indians still relying on traditional tabela-milk (unpasteurized) supplied by their local milk vendors.

In India, ATM machines are already operational in select states like Kerala and Gujarat. Kerala’s milk co-operative Milma had recently launched milk ATMs in select residential colonies of Kochi. Moreover, we also have a similar system operating at Anand (Gujarat) under the initiative of Amul Dairy.

These machines will have supply of tetra-packed milk sachets and other milk-based consumables such as curd, cheese, ice-cream and paneer; being dispensed to end users via coins and token facilities.

Having said above, the installers of the ATM machines need to take care of various elements, including an ideal location for the vending machine, before settling for such hassle-free system aimed to serve consumers.

Important Points in Maintenance of Milk ATMs:

Determining an ideal location
It should be an all weather machine
Inventory Check-up & Re-stocking
Regular maintenance of machine
Proper operation of coin-slot

At first, it should be an all-weather machine which can stand the tests of time. Milk is a highly perishable product and hence inventory check-up gains most significance in this business. Apart from inventory and cash checking, regular maintenance of the machines, including proper operation of the coin-slot, should be conducted to protect it from external factors.

What do readers think – Will this Pune initiative be successful?

Delhi gets its first Laundromat – A draw from the Western culture?

Viral Dholakia — Tue, 18 Jan 2011 12:06:35 +0000

Money-making has become a tough proposition in this highly-competitive world – where keeping competitors at bay on a constant basis is always a challenging task.

Under such circumstances, it would be dreams come true if you’ve an innovative idea or service to offer, which is virtually non-existent in your nearby locality. One such unique concept, related to the western concept of community washing machines, is being reported to be making waves in Delhi.

Yes, this concept of self-service laundry system – popularly known as Laundromats – is already existent in advanced western countries such as the UK, the US, Canada and Australia; and prominently used by hostellers, foreigners and even working housewives.

The Delhi-based Laundromat at Satya Niketan is a walk-in laundry facility, where people pay and use a coin-operated washing machine to wash and dry (yeah! even drying clothes is a big headache during monsoons and winter season) a maximum of 6 kg clothes for an hour of spin-off. And, if you’ve hostels or college around the arena, it could be only a matter of time before you start gaining footfalls.

For the uninitiated, Laundromats are commercial public laundries – usually coin-operated and self-service – that are made available to individual customers who are usually not equipped with a washing machine or dryers in their living space.

However, some laundries do employ staff or a full service wash facility for the customers. In fact, the business of Laundromats are so common is America, that some staffed enterprises also provide facilities like dry-cleaning pick-up and drop-off. Not only that, many housing societies have Laundromats within premises itself.

Coming back to the Delhi facility, what comes as a little surprising to me is its high cost – Rs.150 for each round of wash-up. On simple calculations, I figured out that a family of 4 members could easily generate washables to the extent of 6 kg clothes or even more on daily basis.

Does that warrant Rs. 150 for a machine-washed outsourcing service that my housemaid could do, for an extended period of 10 days, at the same cost?

Oh! Yes, availing of such launderette service is just fine if your housemaid hasn’t turned up on a particular day due to illness. It could also be a blessing if you’re bachelor studying in a hostel wherein you accumulate clothes for whole week and get them sloshed over the weekend, all at once.

Usually, 4 aspects go into a successful Laundromat business:

Location of the Laundromat
Length of a spinning cycle
Price of the service
Whether Self-service or staffed service?

Finding a good location – a residential area – is the most important part in settling for a Laundromat business; preferably nearby some established paying-guest facility where people visit for a temporary stay and need to wash their Lenin once in a while.

A good Laundromat should also be fully sanitized and have presence of at least an attendant (if not staffed serviced) during the hours of operations who will be responsible for cleaning the washers and tables, clearing-off the detergent residue and checking the results of wash-up.

Most of the Laundromats are pretty crowded. An ideal setting would be the one with more washing machines at work which aim to provide a solitary experience.