Tag Archives: Apple Inc.

5 Historical Market Research Disasters You Might be Committing Right Now

Hinderberg zeppeling crashing against tower

Market researchers labor hard to make sure probabilities work to the benefit of their organizations. It’s as much of a numbers game as it is a value-finding egg hunt. After all, marketing campaigns are typically long and expensive, with failure something akin to the Hindenburg disaster (certainly one of history’s great marketing catastrophes, beyond the horrible human tragedy). Yet the reality is that there are instances where market research contributes to the very crashing of product zeppelins.

Here are some of the major misadventures of market research:

New Coke

 

 

This is easily one of the most notorious failure of marketing analysis, although some business conspiracy theorists contend it was a ploy to actually deepen the desire of an iconic product by its removal and return (Michael Jordan mastered this years later).

Regardless, the sad tale is that in early spring of 1985 Coca-Cola changed its formula after almost a century. The company feared that Pepsi was making too many inroads in the soft drink market. In any event, the release of New Coke was met with widespread resistance, including:

Protest groups — such as the Society for the Preservation of the Real Thing and Old Cola Drinkers of America (which claimed to have recruited 100,000 in a drive to bring back “old” Coke) — popped up around the country. Songs were written to honor the old taste. Protesters at a Coca-Cola event in downtown Atlanta in May carried signs with “We want the real thing” and “Our children will never know refreshment.

(Yes, we’re talking about carbonated water here. This underscores the power of branding.)

In July of that year, Coca-Cola switched back to the old formula.

What market research said: New Coke actually proved to be better in taste choices, not only beating Pepsi but also Old Coke. Some accounts report the company tested up to 200,000 consumers. Doesn’t get more mathematical than that, does it?

What market research overlooked: The brand Coke represented an American lifestyle from a bygone era. Furthermore, if it ain’t broke don’t fix, and change can be perceived as an admission of weakness. As marketing academic Daniel Turner said:

In a naïve way, it made perfect sense for Coca-Cola to improve its product, making up for a known deficiency versus a focal competitor. But it made a fundamental error in forgetting what value it was offering customers—brand associations of America, friendship, nostalgia. These are emotional associations we cannot ignore.

Protesters not angry at the Cold War but at New Coke

Protesters not angry at the Cold War but at New Coke

The Ford Edsel

 

 

This lead balloon is the quintessential poster child for a marketing research problem. Released in 1957, Ford’s new vehicle was meant to be the evolutionary zenith of automobiles. The Edsel, featured Teletouch steering wheel, electric gear-shifting, self-adjusting brakes, a nifty speedometer redesign, and many other gadgets. It ended up costing the company $400 million, never resonating with the consumer.

What market research said: Everyone wants an encompassing product that does and has everything (it certainly worked for smartphones and personal computers). That certainly should have overcome an unattractive name in a world with so many car models with odd names (the name actually based on Henry Ford’s son).

What market research overlooked: Being everything to everyone is not always a good idea (just ask Google+). Perhaps more than that, as a marketing source explained: “One of the biggest problems with the Edsel was that it was competing against itself, matching retail value on many of the cars in Ford’s established Mercury line without bringing anything new to the table.” Lastly, hubris blinded Ford during its golden age, making it perform one of the worst mistakes in marketing by offering “the answer to a question nobody asked.”

In recent times the Ford Edsel has become a collectors item for a hipster generation

In recent times the Ford Edsel has become a collectors item for a hipster generation

Calvin Klein’s Sex Sells Campaign

 

 

Calving Klein certainly made money pushing the envelope, as have many other fashion brands. After all, trendy often means counterculture. In 1999 Calvin Klein overstepped the line with a series of commercials featuring underage, barely dressed amateur models—in a wood-paneled room basement, being interviewed by a creepy middle age man. The commercials were certainly stylistic and highlighted denim in all its glory. The public blow back was intense, however. The company yanked the commercials within 24 hours.

What market research said: Sex sells, goes the conventional wisdom, and when parents feel offended it commonly means teens and young adults will open their wallets.

What market research overlooked: Market research methodology should never take conventional wisdom for granted. According to a 2007 study from the University College London, sex actually doesn’t sell:  “There was no main effect of advertisement type on brand recall suggesting that the presence of sex in advertising does not assist memory for the advertisement.”

More importantly, an air of pedophilia is never, never a good atmosphere for advertising…or really anything…

I don’t have to quote any experts on this. Look at the video:

 

McDonald’s “I’d Hit It”

 

 

McDonald’s launched in January 2005 a doomed banner campaign presenting a young man slobbering over a double cheeseburger. The young man says: “Double cheeseburger? I’d hit it. I’m a dollar menu guy.”

McDonald’s quickly pulled the advertisements before any instances of romance between human and burger. There is certainly an odd connection to this year’s marketing campaign failure from McDonald’s—where consumers could express romance before a cashier for a free meal.

What market research said: Young people develop a certain jargon. Being perceived as sensitive to their culture, like talking their lingo, makes perfect sense in a marketing plan template.

What market research overlooked: McDonald’s own marketing department admitted it did not research the term “I’d hit it.” They say content is king in marketing, but context can be the executioner. Research every term, and go here if you’re still wondering about “I’d hit it.”

mcdonalds_id_hit_it marketing failure

It would be interesting to see what interpretation McDonald’s would have of Britney Spears’s first hit single

 

Google Glass

 

 

Not too long ago, Google possessed the Midas touch when it came to anything in its grasp. That ended last January when Google Glass unceremoniously failed. The dawn of the wearable tech got a rude awakening with a resounding rejection from consumers. This seems odd, since outside of the NSA, Google leverages the largest sphere of information in the galaxy.

What market research said: If tech can be shrunk to fit in the hand, as with smartphones and tablets, why not other parts of the human body?

What market research overlooked: Everything, it seems. Privacy and price concerns alienated much of the public—and the fact Google released early copies only to rich geeks in the west coast, thereby branding the product as elitist instead of the “affordable luxury” philosophy of Apple. As a CNN story explained:

“Google’s fast retreat exposes the most fundamental sin that companies make with the “build it and they will come” approach. It’s a process that tech companies rely on, referred to as public beta testing.”

Speaking of, it should be interesting to see what happens to Apple Watch at the end of April, although it’s safe to assume it actually has done some market analysis.

(And I should bring up Google+ again, the Edsel of social media).

Would offering a mustache with each pair have saved it?

Would offering a mustache with each pair have saved it?

Obviously there are often variables that no market research studies can predict. Ford couldn’t foresee a sudden recession in 1957 that crippled any possibility of saving the Edsel; Google can’t be blamed that America has entered an Edward Snowden era. Nonetheless, each of the examples above reveals serious blind spots in marketing research that were costly, if not sadly humorous.

Perhaps Jim White, a founding partner of RealityCheck, offers what is always needed for market research in his Greenbook article: empathy, experience, sharing, translation, and quality.

With these elements, surely some of the marketing Hindenburg’s could have been avoided. In the end, these examples showcase the limitations of market research—especially with its heavy leniency in number crunching and quantitative studies.

In the end, there are humans involved who tend to defy all probabilities.

button panel book second

 

Replicating Apple’s Success

Replicating Apple's Success

Apple didn’t invent laptop computers, MP3 players, smarthphones and PCs. Its success would lead people to believe otherwise.

While Apple does create some great products, a large part of its success lies with not only with a marketing strategy that is unparalleled in the industry, but in the little details that differentiate Apple from the competition.

We’ve compiled a list of examples of what makes Apple stand apart from the crowd and how companies can implement some of these strategies for their own success.

UNIQUE CUSTOMER EXPERIENCE

Apple is known for its great customer service. This is evident by how they simplify their SKU process. Each store from Wal-Mart to Target to Best Buy, all have different SKU numbers that relay basic information such as price, model number, to determine if the item is in stock. At the Apple Store, the SKU provides this information, but it also provides details about the warranty, the date the product was purchased, and so forth. This makes it easier for Apple employees to help their customers when they have problems with a product.

The simplistic SKU process isn’t the only way Apple excels in customer services. Their employees tend to have better product knowledge, perhaps because they’re better trained or simply because their focus lies on a specific product, rather than providing supports for 10 different brands.

Businesses live and die by their customer service. In today’s world, bad customer service isn’t relegated to word-of-mouth reviews. With websites like Yelp, customer service doesn’t end when the customer buys the product. Providing bad customer service can become viral. So, it’s important to have great customer service.

BE INNOVATIVE

Apple didn’t invent smartphones, MP3 players or PC computers, but they certainly act or would make one think they did. Apple simply boil these inventions down to their simplest functions, and builds from there. For example, Apple made it easier for non-computer savvy consumers to transfer music from their computers to their iPod. Apple also created iTunes as a way of making it even easier for consumers to purchase the music they wanted (without picking up any malware and/or being sued by music industry) and easily transfer that music to their iPods.

A business doesn’t need to invent the next big thing. Simply looking at existing products on the markets, and determining how to make that product better is sometimes enough. It can mean making a product simpler, or it can mean adding features that competitors haven’t thought of.

CREATE A UNIQUE DESIGN AESTHETIC

From software to hardware to packaging, Apple has a very distinct design aesthetic. Their design aesthetic is simple, sleek, and clean. This aesthetic is even found in their stores. In fact, this design aesthetic is synonymous with their brand. Even without the Apple logo, customers can quickly identify an apple product.

Have an aesthetic that flows from the design of the product all the way to the packaging of the product. Only change the design aesthetic if it is needed. Allow the customer to recognize the aesthetic and the company’s brand. Eventually, the customer will see the two as inseparable.

BE DIFFERENT

In the beginning, Apple was a challenger in the computer market. Instead of focusing on “Big Business” like their competitors, Apple focused on the average consumer and small business markets. At one point, Apple computers was marketed to design-savvy customers. These were graphic artists and those in the layout and design departments of newspapers and magazines. If a company or customer had to use computers to create designs, Apple was the go-to brand.

When Apple entered the MP3 market, the focus of their marketing and ad campaigns were about being different. The famous dancing silhouettes were of people dancing to the beat of their favorite music. Each silhouette ad featured a different song.

A tenet of business is product diversification. One of the ways businesses can succeed is by having different products lines with multiple models. Apple is different in this way. They have done the opposite. The company has five product lines. Most of the products they produce have only one or two models.

Even product pricing tends to be a strong point for Apple and a key differentiator among the competion. For example, most PCs in the market place are listed at different price points – Dell sells computers for as low as 249 dollars. The lowest price for a MacBook is 899 dollars. Apple is known for producing high quality products. As such, their core customers believe that whatever Apple produces are worth the high price tags.

Know what the competitors are doing and try to be different. Find their weaknesses and use that as a way to stand out. For example, if a competitor has bad customer service, then have exceptional customer service. Do the competitors’ have a history of building sub par products? Then build high quality products.

Yes, Apple is a marketing savant. In 2001, their stock price was listed at less than three dollars. Today, their stock price is above one hundred dollars a share. Any company can learn from Apple and translate that into success.