Understanding the Role of Consumer Insights in Marketing

Importance of Knowing Your Audience

• Fundamental to effective marketing is understanding the consumer.
• Before product creation, companies must know:
  • Who is the product for?
  • What problems will it solve for that customer group?

Consequences of Inadequate Market Research

• Many business failures are due to lack of marketing research.
• Probability of successful product launch is low without market study:
  • 60% to 95% of new products fail depending on the industry.
• Ineffective marketing and promotion:
  • 50% of advertising has no effect.
  • 85% of promotions lose money.

Benefits of Thorough Marketing Research

• Prevents costly business mistakes.
• Provides insights into customer needs and wants:
  • Example: If customers prefer cars with specific features, like four wheels or engine noise, manufacturers must cater to these preferences.

Forms of Market Research

• Observation of customer behavior.
• Focus groups and surveys.
• Collection of behavioral data.
• Conducting experiments.
• Goal: Identify behavioral patterns within consumer groups.

Case Studies

• Coca-Cola:
  • Surveyed Millennials to understand lifestyle preferences.
  • Discovered a trend towards a healthy lifestyle.
  • Launched "Coke Life" targeting consumers interested in bio ingredients and fewer calories.
• Pepsi:
  • Failure in foreign market due to lack of preliminary research.
  • A focus group could have prevented a costly mistake.

Marketing Research as Business Insurance

• Though expensive, it can prevent significantly more costly damages.
• Acts as a safety net against market missteps.