No, I do not want to make a prediction about the death of market research as such, but rather some of its forms that have traditionally been the “cash cows” of large market research companies.
Take, for example, panel research. The very essence of retail panel research is being ruined by the growth of e-commerce. Measuring at the point of sales is becoming more complicated now. Who can possibly register the flow of goods from numerous on-line shops, especially those outside the country? There is a missing link there, and the gap is growing.
Another area which is unlikely to survive very long is test market with measuring advertising response. As online marketing budgets are growing and the advertising shifts from TV and radio to the Internet, the companies feel more empowered to track their own advertising campaigns and optimize them as they please.
Even in qualitative research, traditional focus groups may, to a large extent, be replaced by scanning online forums and social media for new ideas or suggestions for improvement. Moreover, the data are available globally and in real time at no extra cost!
And last but not least, desk research has become increasingly simplified through the use online search engines and other digital data mining tools. Possibly, in some years, complete market research reports which normally took months to create and used to cost thousands of dollars will be created in a few mouse-clicks using special software.
Think of the new World 2.0 as an interlaced, data-overflown place, where the consumers and whole markets are getting more and more transparent, with or without professional market research as we know it. Shifting strategic weights and entering new fields of play will probably be the biggest challenge for market research companies in the years to come.
Cooper talks about fifteen critical success factors for innovative products, based on the NewProd Study. To sum up, I want to single out several reasons why innovative projects fail.
- The product/service developed does not have a real competitive advantage against competing products (also substitutes) and does not offer any added value for the customer. In this case, you have to compete on price, which is often not possible for innovative products due to high R&D costs.
- The target market is unattractive and the product is not scalable to other markets (including the markets abroad).
- The necessary research on the target market, as well as financial and technical feasibility of the project had been skipped or insufficiently conducted before the project was pushed into the pipeline. Too much rush in implementing the project. Think of the time-to-profit, not time-to-market.
- The product or service were not defined clearly from the start (including technical specifications, distribution channels and market positioning). I think the reason behind it is the desire to leave the side door open for sudden changes. But without any clear definition the project cannot be successfully managed by a cross-functional team.
- The project team members cannot (missing competencies) or are not willing (missing understanding) to work on the innovative project. The human factor must not be underestimated!
- The company has too many projects in the pipeline, the decisions to “kill” do not take place on time. This leads to the resources being spread too thinly and insufficient time and money granted to the potential winner projects.
- The organizational structure and the culture of the organization do not allow for the necessary flexibility in the innovative process. The innovative projects have no “advocates” in the company management.