Zeno's Paradox
While critical thinking may not make up for a lack of knowledge, it is essential for gaining knowledge.
Tuesday, October 07, 2003:  
Management, Human Factors:
Creating A Killer Product (Forbes.com)
Three in five new-product-development efforts are scuttled before they ever reach the market. Of the ones that do see the light of day, 40% never become profitable and simply disappear.

Most of these failures are predictable--and avoidable. Why? Because most managers trying to come up with new products don't properly consider the circumstances in which customers find themselves when making purchasing decisions. Or as marketing expert Theodore Levitt once told his M.B.A. students at Harvard: "People don't want to buy a quarter-inch drill. They want a quarter-inch hole."
Hmmm... Not the greatest example for making the point. What's the hole for? So the plug on the television will reach the outlet?...
Consider the recent efforts of a fast-food chain that wanted to improve milk shake sales and profits. The chain first took the usual "focus group" route, assembling panels of customers to ask if making the shakes thicker, more chocolaty, cheaper or chunkier would satisfy them more. The chain got clear inputs on what the customers wanted. But after the changes were made, nothing much happened to sales or profits.
Focus groups are great for making clients more confident with their decisions, whatever the decisions may be...
So a new set of researchers came in. Their task was to understand what customers were trying to get done for themselves when they hired a milk shake. This approach helped the chain's managers see things that traditional market research had missed.

The researchers spent an 18-hour day in a restaurant. What they found was surprising: Nearly half of all milk shakes were bought in the early morning. Most often, the shake was the only item purchased, and it was rarely consumed in the restaurant. What was going on here?

Turns out most of the customers had hired a shake for very similar reasons: They faced a long, boring commute and needed something to make the trip more interesting. They weren't really hungry but knew that if they didn't eat something soon, they certainly would be hungry by 10 a.m. They also faced constraints: They were in a hurry, often wearing their work clothes, and had only one free hand.

...

The fast-food chain's traditional marketing research focused on its milk shake sales against those of the competing chains. The predictable script: Gain by cutting into the business of others. But that's not really the point here. In the customer's mind the morning milk shake really competed against boredom, bagels, bananas, doughnuts, instant breakfast drinks and, possibly, coffee.
Another example of how good research and analysis can lead to rethinking product and marketing opportunities...

Note however that two of the most important findings by the researchers should have been available through other means: the time milk shakes were purchased and that they were single-item purchases. These facts alone should be enough to get people thinking about new product opportunities...

(I'm partial to bagles myself.)

    -  Ron  12:31 PM

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