When Market Research Goes Wrong

When Market Research Goes Wrong

Research & Development is one of the leading practices in almost all of the firms today, regardless of the industry. Firms spend a lot of time, resources and efforts to gather every single detail that might be a factor to their strategy. Analysis of customer expectations, feedback, scope for improvement, and innovation are the major areas where R&D is required.

But what happens when this research goes wrong? What if one detail, no matter how small, gets unnoticed?

In the mid-1980s, the Coca-Cola Company made a decision to introduce a new beverage product. The company had evidence that taste was the single most important cause of Coke’s decline in the market share in the late 1970s and early 1980s. A new product dubbed “New Coke” was developed that was sweeter than the original-formula Coke. Almost 200,000 blind product taste tests were conducted in the United States, and more than one-half of the participants favored New Coke over both the original formula and Pepsi. The new product was introduced and the original formula was withdrawn from the market. This turned out to be a big strategic mistake! Eventually, the company reintroduced the original formula as Coke Classic and tried to market the two products simultaneously. Ultimately, New Coke was withdrawn from the market.

New Coke

First, there was a flaw in the market research taste tests that were conducted. The organization assumed that taste was the deciding factor in consumer purchase behavior. Consumers were not informed that only one product would be sold. Thus, they were not asked whether they would give up the original one for New Coke.Second, no one realized the symbolic value and emotional involvement people had with the original Coke.

Because of this mistake, the company incurred huge financial loss and dip in

brand value.

Another important aspect to consider is, whether the market is ready for the product or not. The product defines a new category and requires substantial consumer education. If consumers can’t grasp how to use your product, it’s toast.

Ponds toothpaste is a classic case of product failure by extension.‘Ponds’, the popular brand of face cream, didn’t prove to be quite so popular when it applied its name to toothpaste. In a blind test environment, people were not able to differentiate ‘Ponds’ toothpaste from that of ‘Colgate’. The real problem was that no one seemed to be interested when Ponds label was attached to the toothpaste; although Ponds had successfully extended its brand before to soaps & shampoo, but the attributes required to make the toothpaste a success were simply missing.

Ponds Toothpaste

To consumers the brand Ponds was nothing but fragrance & a consumer product for external application only; this did work brilliantly with talcum powder, soaps & creams, however the attributes for toothpaste are taste. This mis-match between the attribute of toothpaste & the soap created a disillusionment in the mind of consumers. Thus, when Ponds ventured into oral health care, it was ignored. Consumers simply refused to acknowledge its presence leading to a sudden but painful death of the product.

About Us

iSpirit Business Solutions (iSBS) is a business research and advisory organization which supports clients with unique solutions for information research, business networking and strategic consulting. Our robust business information sourcing & industry engagement generation skills ensures sustainable cost and higher ROI for the campaigns. Our collective experience of over 20 years in B2B research and engagements, with an access to a network of over 30 million industry personnel, enables us to deliver cost effective custom support for Information Research, Marketing & Lead Generation, B2B Sales and Business Networking initiatives.

Our aim is to equip MSMEs with an extended reach to explore global customers. We have converged with industries such as Industrial Equipment Manufacturing, Machinery, Mining & Metals, Health-Care & Life Sciences, Chemicals, Mass Transportation etc. while supporting our clients on diverse business information research scopes and industry engagement activities.

Our comprehensive understanding of industry value & supply chains helps us deliver efficient information & engagement based solutions.

The business solutions we offer primarily include activities like:

1.Business Information Research 2.Industry Engagements Development

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