On my previous post, I have given a little explanation on what market research is. Now let’s take a study case to have a firm grip on the subject.
Take a company called, XYZ, a leading customer-goods manufacturer in a country. They produce snacks in various type. If you ask people what brand will they think of when you ask them about chocolate cracker, XYZ is their top-of-mind brand. In other words, they are currently in good standing compared to their competitors.
As most business do, they want to expand. They want to invent a new snack category. They want to make an equivalent of pancake but make it as snack that will taste like crackers. Yeah, I know that weird. But hey! We’ll never know how it taste until we have a bite, right?
Back to the topic, so this company has done their research, in terms of taste, look and package design. The product itself is ready. But, the problems starts arousing when they distribute the products to stores. Sale number is not impressive at all. It is mortifying. Customers don’t like it or should I say, customers are not buying the whole concept of it. Do you see where the real problem lies?
Yes, 100 points for those who guess correctly. They invented this new category without any knowledge on how their customers-to-be will react. They produced the products without any assurance whether there will be any buyers or not.
You know what they should have done before they spend all their big budgets in producing their products and distributing all across countries? You are right. Do some research on the market. Have some product testing to see how the market will react to this product prior to the big launching. They should have created some samples and invite some people in the targeted market that will actually represent them into group discussion to talk over this product. It is done to get inside of the head of their consumers-to-be.
By having that discussion, the manufacturer will get the idea on whether the whole concept is acceptable in the market. Then if it is acceptable, how good their product will satisfy them in terms of taste, size, package and other intangible stuffs like emotional needs.
This is one of many sides in market research. I will give out other study case that will showcase how market research comes really handy when it comes to making the best out of your business.