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About this book

Too many new products fail. New products which are hard to differentiate from existing products won't capture the customer's imagination. The failure is due to a poor understanding of customers' needs. Companies need to take a radical approach to identifying customers' real needs, and this book demonstrates innovative ways to achieve this.

Table of Contents

Frontmatter

Introduction and Traditional Methods of Market Research

Frontmatter

1. Introduction to Customers’ Hidden Needs

Abstract
Many new products fail. Far too many! Products fail regularly in both the manufacturing and service sectors. By failure we mean that these new products fail to excite customers and fail to reach the sales and market share goals set by the companies that develop them. Research shows that the major reason that new products and services fail is that they are too similar to existing market offerings. New products which are hard to differentiate simply do not capture the customer’s imagination. However, the lack of differentiable features is a symptom. The cause of the problem is a poor understanding of customers’ needs. Companies need to take a radically different approach if they are to be successful at identifying customers’ real needs and this book is about innovative ways to conduct market research. Specifically, it addresses how to unveil what we will term customers’ hidden needs.
Keith Goffin, Fred Lemke, Ursula Koners

2. Surveys and Interviews

Abstract
Surveys are the classic tool for market research and because they are ubiquitous, every one of us has at some time been asked to answer survey questions. Writing survey questions is deceptively difficult and, consequently, many questionnaires are so badly phrased or designed that the results are of little value. Therefore, it is absolutely essential for marketers to become good at survey technique. Although customers may have difficulties in answering direct questions about their future product requirements, surveys and interviews remain at the heart of market research and they are essential complement to newer methods for identifying hidden needs.
Keith Goffin, Fred Lemke, Ursula Koners

3. Focus Groups (And Variations)

Abstract
Most companies which want to listen to the voice of the customer rely either on surveys and one-to-one interviews or focus groups. The term focus groups derives from the term focused group discussion2: groups of people with sufficient know-how, or a group of current and/or potential customers engage in a relatively unstructured discussion on a selected topic related to a product or service. Members of focus groups are usually individually recruited, based either on their personal experience of the topic of interest, or simply their willingness to participate in the focus group.
Keith Goffin, Fred Lemke, Ursula Koners

New Methods of Market Research

Frontmatter

4. Ethnographic Market Research

Abstract
Most marketing executives regularly visit customers and they will often observe them using products. However, casual observation and informal discussions with customers are unlikely to lead to breakthrough products. Also, such visits cannot be compared with the thoroughness of ethnographic market research, which has two main elements: systematic observation and contextual interviewing. There is nothing casual about the way ethnographers study tribal cultures and so, in this chapter, we will stress the need to plan and conduct observation in a similarly meticulous way. “Systematic observation is a research method in which events are selected, recorded, coded into meaningful events, and interpreted by non-participants.”2 This definition contains several elements that differentiate systematic observation. First, what is observed is selected, which means that the times at which we observe customers interacting with products need be chosen carefully. Second, coding implies that data are categorized in a painstaking way to reveal underlying meanings and issues. Finally, the definition’s reference to nonparticipants implies that the interpretation is made objectively.
Keith Goffin, Fred Lemke, Ursula Koners

5. Example: Warehouse Equipment Research

Abstract
This chapter describes discovery research into the opportunities for innovative warehouse equipment. It shows how ethnographic market research can be conducted using the approach presented in Chapter 4. The discussion is based on an actual project conducted in 2007 for a major manufacturer, which for reasons of confidentiality we will refer to as WarehouseEquipCo.
Keith Goffin, Fred Lemke, Ursula Koners

6. Repertory Grid Technique

Abstract
Psychology is a science that focuses on understanding the workings of the brain and how people think. In attempting to understand such complex processes, psychologists do not ask direct questions such as “how do you think?” However, in trying to understand their customers, many companies rely solely on direct questions posed through focus groups and surveys. The challenge in understanding customers should not be underestimated—sophisticated approaches are necessary to generate the insights to develop breakthrough product concepts. So it is not surprising that an approach developed for psychology—repertory grid technique—has important applications in market research.
Keith Goffin, Fred Lemke, Ursula Koners

7. Involving the User

Abstract
Traditional market research keeps customers at arm’s length in that they are asked what type of products and services they would like but then they have no further involvement in new product development. In short interactions with market researchers, it is difficult for customers to articulate the type of features they would like, particularly if they are unaware of the technological possibilities. However, some customers do have the expertise to know what is technologically possible, and others may have already modified their existing equipment to cope with its limitations. Some consumers are interested to have their views heard by their favorite companies, and yet others are even willing to assist with product development. Involving the user is the term we shall use for a range of techniques that companies can apply to collect customers’ ideas and tap into their expertise in the development of innovative products and services.
Keith Goffin, Fred Lemke, Ursula Koners

8. Conjoint Analysis

Abstract
Before making a purchase decision, a customer will often compare several products, each of which is likely to have a different price and a different set of features. A more expensive product is likely to have higher performance but it may be visually less appealing. Another product will offer a combination of features with less performance but a more attractive design and reasonable price. For example, we might like the biggest LCD television, with the built-in DVD recorder but we may only be able to afford the mid-range products, which have some good features but not everything we would like. Before making their final decision, customers make subconscious assessment of the range of products on offer. Conjoint analysis (GA) is the method that allows us to understand this subconscious assessment—the way customers compare and assess different services or products.
Keith Goffin, Fred Lemke, Ursula Koners

Designing Breakthrough Products

Frontmatter

9. Combining the Techniques: Designing Breakthrough Products and Services

Abstract
We opened this book by commenting on the large number of new products and services that fail and we have stressed throughout that understanding customers’ hidden needs is essential to the successful development of breakthrough products. To identify hidden needs, innovative techniques for market research need to be combined with more traditional ones. Using a combination of techniques generates deeper insights and also allows the results to be triangulated (crosschecked). But recognizing hidden needs is only the first challenge; creative product and service concepts need to be developed that address the hidden needs. In this chapter we explain how to combine different market research techniques to gain deeper market insights and then we discuss how these insights can be used to design breakthrough products. The approach we will present is not theoretical; it is based on our experiences working with a number of leading organizations including Agilent Technologies and Bosch Packaging Technology in the manufacturing sector, and VirginMoney in the financial services sector.
Keith Goffin, Fred Lemke, Ursula Koners

10. Creating a Culture Focused on Hidden Needs

Abstract
For organizations that always strive to be at the leading edge, the decision to adopt new techniques for market research and to focus on hidden needs will be an easy one. However, in many organizations, there can be significant barriers to the adoption of a philosophy of hidden needs. Sometimes the senior management team is unaware of the powerful new techniques for understanding customers. Sometimes it is R&D departments, with little knowledge of the social sciences, that are skeptical. However, it is often marketing departments that present the greatest opposition. Some marketers feel they are the guardians of their company’s knowledge on customers’ needs and are reluctant to admit that they need to learn new approaches, as this admission might be perceived as a sign of weakness. In fact, recognizing that more insightful customer data need to be generated using enhanced techniques is a sign of strength but one that only top marketing departments exhibit. In addition to marketing opposition, there are a number of reasons why it can be challenging for organizations to focus on hidden needs and so this chapter:
  • Starts with a detailed case study on a business unit of the German company Bosch, and how it made the decision to introduce new methods for market research.
  • Comments on the Bosch case study, and the issues it raises.
  • Identifies the barriers that companies face in moving toward a philosophy of hidden needs.
  • Summarizes the key steps required to create a culture that is focused on hidden needs and which develops breakthrough products and services.
Keith Goffin, Fred Lemke, Ursula Koners

Backmatter

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