Tuesday, October 27, 2015

Storytelling in Market Research

Storytelling in Market Research

Foreword
The study of market research wouldn’t be complete without a discussion of New Coke. It’s a classic example of miscommunication between the company and the consumer and blind following of research. In the field of marketing this story represents a company being persuaded by the storytelling of numbers and statistics, without taking into account the largest component of marketing: the human element. Smart market research requires hard numbers, but marketing is still an art. Successfully navigating the market means having intuition based on fact, and then packaging the product’s message in a neat thirty-second to one-minute ad spot, and in such a way that it resonates with the consumer. The story of New Coke is the story of what not to do when conducting market research. (This example comes from discussions in my marketing management class and from Qualtrics.com, a market research firm).

Example Story
Setup: Coca-Cola’s research tells it that taste is the number one factor in the company’s declining market share.
Back in the mid-1980s, Coca-Cola market share was declining and it was frantically trying to correct the fall. Its research told it that taste was the culprit. So the company conducted hundreds of thousands of taste tests, and moved forward with blind assurance that New Coke was the answer to its market share woes. New Coke could have been a welcome change in Coca-Cola’s product line-up, but what it didn’t do when it was conducting research was tell consumers that they would pull Classic Coke from stores; Coca-Cola didn’t realize the emotional attachment and value of the Coca-Cola taste. So when Classic Coke was removed from stores, consumers rebelled.

Analysis
This anecdote demonstrates the power of correctly, or incorrectly, reading causes and effects. Given the problem of declining market share, companies must correctly identify causes and take guided, measured, fact and intuition-based steps to produce favorable effects. Persuasion in this story comes from the data collected from hundreds of thousands of people. Because the data was flawed, it persuaded Coca-Cola to take action that would lose it millions of dollars.

Retelling
Setup: Instead of focusing on the company as a whole, I focused on the executives’ reactions to imply their reliance on the consumer:
The Coca-Cola boardroom is in a panic. After seeing market shares fall, the soft drink powerhouse again watches its numbers plummeting to the ground. Executives pace around the room, stare out of windows, sit twiddling their thumbs. Where have all their customers gone? The simple truth is that Coca-Cola executives didn’t trust their original, time-honored taste to bring in customers. The resulting consumer rebellion and loss of millions of dollars is one of the most recognizable marketing mishaps on record. And what dastardly product did this? New Coke, “It actually tastes better!”

I rearranged the story somewhat to start at the end, when consumers left Coca-Cola. I also shifted viewpoints from the company to the executives to reiterate just how reliant on consumer loyalty they are, and how not trusting that loyalty can have destructive results. All their jobs are on the line because of a market research mishap.

3 comments:

  1. It is interesting to see that marketing relies solely on viewers and consumers. In both of your examples, I could see how the viewers/consumers made an impact on what would be produced in an ad.

    ReplyDelete
  2. I sense the tension in the room in the second re-telling of your story. You're absolutely right--marketing IS an art. This is only semi-relevant, but I recently heard a piece on NPR where the marketing team for Carls Jr sat in a room and tried new menu items. Sometimes, a sandwich would taste great, but if the team could not come up with a name that felt right to them, they would completely scrap the burger. Simply over a name! Marketing can be a picky industry.

    ReplyDelete
  3. It's interesting looking at the storytelling involved in Bill Cosby's speech. He makes an ethical appeal, saying, "you know me", and talks about how he's always loved Coke, but now it's better! This could be effective in convincing long-time Coke fans, and more importantly, consumers who had recently left because of taste, to at least try new Coke. But the story-telling doesn't do much good if the result of it ends up causing wide-spread consumer revolt.

    ReplyDelete