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.
