The use of qualitative research to inform new product development was the core idea in a presentation by Jeffrey Henning of Affinova at the 2012 NewMR Qualitative Event.

This is not a new idea. Probably the most common methods for testing new consumer product ideas, at least in the initial phase, are qualitative (focus groups, IDIs, etc.). More often than it should, qualitative research is used as the only base to make decisions about which products to launch, but sometimes it is followed by traditional quantitative concept testing (monadic, sequential, etc.).

Henning suggests going a step further by doing product optimization, using conjoint analysis or evolutionary algorithms, where all ideas are considered in multiple combinations and a particular combination becomes the winning product. Henning cited research on research showing that on average, product optimization doubles new product success rates and generates more than two times revenue.

This indicates that product optimization is more effective and has more predictive power than the traditional qualitative-only and quantitative concept testing often used to identify winning product ideas. However, most of the time product testing never goes beyond the traditional methods or jumps into product optimization without the previous steps. I have been witness to that numerous times. Why?

Budget and time constraints are probably the most common barriers. Funds and timelines may allow doing qualitative or quantitative research, but not both. Another factor is lack of familiarity with product optimization methodologies like conjoint analysis. Many don’t see the connection between qualitative research and these methodologies, so I like how Henning made a clear case for it.

It makes perfect sense to use qualitative research to inform which product attributes and levels should be tested using techniques like conjoint analysis. It is actually the ideal way to do it to avoid including variables that are not relevant and can distort the results.

Doing qualitative research upfront should be seen as an investment to support valid results and increased predictive power of models developed during the product optimization analysis.

 In short:

• Do qualitative research to identify product ideas and attributes that matter and have predictive power
• Skip testing single product concepts and wondering if you picked the right one to test
• Conduct product optimization including all ideas found in the qualitative phase and test multiple combinations until find the winner

It will pay off big time.

Focus Groups are probably the research method with the highest top-of-mind awareness. For many clients I encounter the first thing that comes to mind when they need to conduct market research is Focus Groups.  Focus groups are not right for every research purpose. They should be used for exploration and in-depth understanding, but never to make final decisions.

Focus Groups are more than mere discussions and need a lot of planning if you want to extract any insights out of them. Below are some of the most common mistakes you should avoid when doing Focus Groups (Greenbaun, 1998).

PLANNING

• The research objectives are not clearly defined: Sometimes, due to tight deadlines, clients want to rush Focus Groups without putting time into thinking through what they want to accomplish with the research. Lack of clear objectives often leads to useless results and wasted money and time.

• Disruptive method of communication between the moderator and the clients in the back room: Clients behind the one-way mirror often send notes asking the moderator to probe on a particular question or issue. Sending notes to the moderator creates a set of problems:
  
  
  • The wrong participants are recruited: The quality of Focus Groups depends greatly on the quality of the participants, so clear screening criteria need to be established to avoid:
  • Participants who are not familiar with an issue, product, brand and organization and have little to contribute to the discussion
  • Participants who only have positive feelings about a brand, product or organization. Although  sometimes we want to learn what heavy users and loyal customers want to say, if we don’ have groups we divergent opinions, we won’t  have a point of reference or learn about sources of dissatisfaction and areas in need of improvement

• Groups that are not homogeneous enough in certain variables relevant to the issue which may disrupt the dynamic and course of the discussion (e.g. different educational levels, different socioeconomic levels, gender, age, etc.)

• Not enough time is dedicated to the development of the discussion guide: This should be developed between the client and the moderator and put in writing. It seems obvious, but there are moderators that come to Focus Groups with general ideas of what should be discussed, without any formal discussion guide. Although discussion guides often are modified on the spot depending on the course of the discussion, the moderator has to make sure that the discussion doesn’t take a long detour from the main objectives and that key questions serving those objectives are posed to the group.  It helps to have a formal discussion guide.

• Not enough time is dedicated to the development of adequate stimuli: Often Focus Groups are used to explore reactions to product prototypes, packaging, positioning statements, or ad-like objects (TV commercial, print ad, etc.). Planning is needed to make sure that the stimuli are easily understood and appropriate for the research objectives and different enough to allow us capture different reactions.  The mistake is often to come with not well developed stimuli or with too many of them, resulting in sessions that are not as productive as they could be otherwise.

• Disruptive method of communication between the moderator and the clients in the back room. Clients behind the one-way mirror often send notes asking the moderator to probe on a particular question or issue. Sending notes to the moderator creates a set of problems:
  
  
  • The discussion stops and may make participants lose their train of thought
  • The moderator gets distracted trying to figure out how to incorporate the request in the discussion flow
  • Diminish the moderator’s perceived authority

• Inexperienced moderator: With the increase of DIY research teams at client organizations and smaller budgets, experience sometimes tends to have less weight on the decision about who moderates Focus Groups. This can be disastrous. Experienced moderators use a set of techniques to leverage group dynamics to maximize the positive benefits of interaction among participants and avoid the discussion being dominated by a few voices that can influence others’ reactions to specific questions. Experience in Focus Group moderation can make a difference between successful groups that provide great insights and groups that provide misleading information.

ANALYSIS

• Observers are biased: More often than not, clients come to Focus Groups with pre-conceived ideas and tend to focus on opinions given by participants that confirm what the client already believed to be “true.” There are cases, where the clients totally dismiss what they hear and suddenly become research experts blaming the results on the methodology or the moderator. Clients should be aware of the advantages and disadvantages of Focus Groups and come with an open mind to listen to what ALL participants have to say, not just a few which happen to agree with the client’s point of view. Both the client and the moderator should be as objective as possible if any real insights are to be gained from Focus Groups.

• Results are quantified: More than once I have met clients that want to do several groups and count how many participants express a particular opinion, hoping they can project the results. Results from Focus Groups should not be quantified. It is useless and misleading to quantify results from Focus Groups since they are not projectable. Focus groups are about the big picture and overall feelings (about an issue, brand, ad, etc.) and not individual comments.

The best way to avoid these problems is to plan visits from the moderator to the backroom during the discussion flow, so he or she can discussed with client the intentions of any probing requests. Clients should come to Focus Groups with an open mind and listen to what ALL participants have to say, not just a few which happen to agree with the client’s point of view. Both the client and the moderator should be as objective as possible if any real insights are to be gained from Focus Groups

Focus Groups can provide a lot of insights if done right. Put time into planning, pay for experienced moderators and make sure you use Focus Groups for the right purpose.

As of late I have been receiving many requests to do focus groups. When I ask what the objectives of the research are, and how the information is going to be used, in 99% of the time, doing focus groups is the wrong methodology for what the client wants to accomplish.

In one of the cases, the client wanted to measure advertising effectiveness of a campaign. In another, the client wanted to see how potential customers use some electronic devices with the goal of writing instruction manuals. But the most worrisome case was that of a client wanting to understand the size of the market and who his potential customers were.

Focus groups make sense when the primary goals of the research are to:

• Explore feelings, perceptions and motivations
• Understand why consumers react to a product or advertising message in a certain way
• Provide guidance to a development process (e.g. advertising, packaging, product development)
• Explore issues to form hypotheses when none exist
• Understand the story and why behind the numbers from quantitative studies or key performance metrics (e.g. sales)
• Provide input about issues that should be measured using quantitative research

Focus groups are about exploration and guidance, but don’t give definitive answers. In a recent article about focus groups by Freya Gaertner, she quotes Karen Sandberg who in a Harvard Management Communication Letter writes, “use focus groups not to draw conclusions, but to understand the conclusions drawn.”

Focus groups are not appropriate for:

• Making go/no-go decisions on product, advertising, or promotion launches
• Profiling and sizing target markets
• Measuring marketing effectiveness, awareness and usage

Focus groups have their place in our research toolbox and like any other research method they have advantages and disadvantages, which means they are not a good fit for every research need.

COMMON & APPROPRIATE USES OF FOCUS GROUPS (Greenbaum, 1998)

• New Product Development Studies:  To obtain initial reactions to a new concept or prototype in order to identify strengths and weaknesses and provide guidance on improvements and input for further quantitative and qualitative research.

• Positioning Studies: To explore effective ways to communicate and talk to target consumers about a product, brand or service. However, the final positioning solution should be tested quantitatively.

• Habits and Usage Studies: To collect preliminary data to help understand how consumers utilize products and services before developing a quantitative data collection instrument.

• Packaging Assessments: To identify strengths and weaknesses of various packaging elements during the design stage; to help copywriters to develop the package copy that is most effective, memorable and visible. In more advanced stages of the packaging development, focus groups can be used as a “disaster check” to make sure it is consistent with the brand. Final decision on packaging should then be tested with the help of quantitative research.

• Attitude Studies: To understand how consumers feel about different products and services before or after a quantitative study

• Advertising/Copy Evaluation: To provide input about the potential effectiveness of the advertising based on exposure to rough ideas using storyboards during the creative development stage, and help copywriters understand attitudes towards the advertising during the copy development stage

• Promotion Evaluations: To obtain consumer reactions to promotion concepts so that ideas can be later refined and made more appealing and easier to understand. After a promotional campaign is launched, focus groups can be used to understand why consumers did or did not participate in the promotional program.

• Idea Generation: To identify specific areas where new products – or modifications of existing ones – might offer benefits. As Greenbaum points out, “participants can’t be expected to create new ideas and products. They can talk about the problems they are having and the wishes they would like to fulfilled, but they will not normally be the source of new ideas. These have to come from the client’s or moderator’s interpretation of their comments.”

• Employee Attitude and Motivation Studies: To assess corporate employee’s attitudes towards their organization and identify any problems that should be addressed.

In all the types of research mentioned above, focus groups should be used for exploration and guidance for further research, often quantitative. Never, ever make final decisions on whether to launch a product, select a packaging, go with a positioning concept, or get married to a creative solution for an advertisement or promotion, solely based on focus groups.

 We, as consumers, don’t always do what we say. This is a fact that market researchers have to wrestle with in the design phase of any research project. As Jeffrey Henning pointed out in his recent article, Respondents as Economic Actors: Behavioral Economics & MR, some schools of economic thought have been drawing attention to the inadequacy of the rational choice theory, which assumes that consumers have perfect information about all the alternatives and weigh in pros and cons before making a purchase decision.

Although sometimes this may be true for certain purchase decisions in product categories a consumer values and is engaged with for a variety of reasons, many times consumers make decisions with incomplete information or simply skip the evaluation of options and make impulse purchases or go with what is available.

Henning summarizes the situations where, as behavioral economists have pointed out, actual behavior doesn’t match the rational approach to decision making. These are:

• Rules of thumb: Here consumers rely on heuristics or rules of thumb as shortcuts to decision making. They don’t take into account all possible options and may not make optimal decisions, but their decisions are “good enough.” This may be due to information overload, too many options, time constraints, financial situation, and lack of category involvement, among other factors.

• Emotional arousal: Consumers sometimes make purchase decisions influenced by their emotional state. If the person is calm she is more likely to think through her purchase decision. However, if the person is experiencing strong emotions (positive or negative), they are more likely to succumb to impulse purchases without much thought of the long term consequences.

• Framing: The context often influences purchase decisions in ways consumers may not be aware of. We often compare products to others that are present, particularly on price. The same product may look like a good value at one store or terribly expensive at another depending on competing alternatives and our expectations. Store atmosphere, layout, music, scents, in-store advertising can invite or discourage consumers to buy. For online retailers, the website design, layout, navigation path, graphics, type and amount of information, and trustworthiness indicators, among others, provide a context that influence our decision to buy from a particular online retailer.

• Cognitive biases: As Henning puts it, “individuals overvalue items they own (the endowment effect) or have invested in (the sunk-cost fallacy),” and tend to feel losses more intensely than gains (this may explain why for some, paying for shipping feels worse even if the cost of shipping may be compensated by a price discount). We often assume that others think like us, but are also influenced by the decisions of others (e.g. recommendations by word-of-mouth). We also seem to be wired to think short-term and have a hard time resisting instant gratification, which may interfere with rational decisions that would be more beneficial to us in the long run.

We can probably find these situations in many categories and some are likely to be more prevalent than others. In my opinion, in order to tackle this problem from a research perspective, we first need to understand how consumers make purchase decisions in a particular product category and identify potential segments with different decision making approaches.

For instance, a consumer may consider clothing detergent a commodity and buys whatever brand is on sale at the time of purchase, while another browsers the detergent aisle, opening bottles to check for fragrance, and reading packaging labels searching for harmful ingredients for herself or the environment. The key is segmentation within product categories based on purchase decision approaches.

To capture the nuances and situations influencing purchase decisions, we can’t rely only on traditional concept tests or focus groups. These need to be combined with methods that go deeper and allow us to understand consumer emotions, purchase context, cognitive biases and rules of thumbs. Some of the research techniques that are useful for these purposes are:

• Adaptive Choice-Based Conjoint analysis: Consumers are asked to build their own product based on a set of criteria, information that is used to understand the rules they use to choose products (must-haves and unacceptables) and to present relevant alternatives they would actually purchase.
• Shop-alongs: We go along with consumers in their shopping trip and observe how they make purchase decisions, what the motivators are, how the context influence their decision, the role of emotions, etc.
• Mystery shopping: Consumers get immersed in a shopping occasion and report back their personal experience with different aspects of the purchase occasion.
• Journaling about experiences: Consumers report about their experience with products and services in a journal format using text, video or pictures as the experience progresses.
• Ethnographic interviews: Consumers are interviewed as they carry on different tasks or use products in real time and environment.
• Mobile surveys in real time: Consumers are asked about their immediate and current experience, feelings and opinions via text messages.
• On-site observation: Acting like a fly on the wall, we can watch how consumers buy and use the products and integrate them in their daily life.
• In-Depth interviews: We delve deeper into purchase drivers, cognitive biases, situational factors, etc. Projective techniques can be used to uncover motivators not consciously recognized.
• Neuromarketing research: We use neuroscience, psychology and other cognitive science techniques to study consumer responses to marketing stimuli and products. Some of the responses measured include eye tracking, heart rate, electroencephalography – EEG, functional magnetic resonance imaging – fMRI, galvonic skin responses, etc.

If you want to understand the gap between what consumers do and say, don’t rely only on one research methodology, as each research method provides data that reflect only a few facets of the consumer.

Qualitative research is going beyond in-person focus groups and experiencing a revolution for the better. Jim Bryson, president of 20/20 Research recently did a great presentation at the Fort Worth monthly luncheon organized by the DFW AMA about the latest online qualitative research techniques.

Thanks to the development of new online platforms, the qualitative research field have seen an explosion of new online qualitative research techniques that makes it possible to collect data in ways we couldn’t before.

Among the new online qualitative research techniques, we now have:

• Bulletin boards
• Immersion IDI’s
• Mobile qualitative
• Quantitative-Qualitative hybrids
• Real time chats
• Research blogs
• Research communities
• Social networking monitoring
• Video journals
• Webcam focus groups
• Web-Intercepts/chats

These new online qualitative research techniques have often made qualitative research better, faster and cheaper (not always). Studies using these online qualitative research techniques can be deployed pretty quickly and provide immediate access to transcripts or videos for review.

As for making qualitative research better, Bryson rightly points out to the advantages of most of these methods:

• Geography: it allow us to reach a wide-range of people across different regions without travel
• Candor: due to the privacy and confidentiality of online, many participants feel more comfortable to discuss sensitive topics
• Convenient access: both clients and participants can participate whenever is more convenient to them and their locations
• Longitudinal capabilities: studies can be extended over time as long as needed to understand the groups of interest

Below are some of the most often used online qualitative techniques, their advantages, disadvantages, and applications according to Bryson:

Mobile qualitative research, according to Bryson, will definitely be part of  market research’s near future. This can be easy and comfortable for the participants, although for now is limited to text only. This technique can be used for reaching to difficult groups, send reminders about “homework” given to study participants, and do research at the point of consumption.

Another approach getting traction is hybrid research, where quantitative and qualitative research are combined in one data collection opportunity. 20/20 Research recently launched a new service called Quallink where participants start in a survey and then are enrolled in a qualitative study. Hybrid research can also be done using SurveyGizmo, which has the capability to integrate online surveys with chat sessions from iModerate.

The main advantages of a hybrid approach are:

• Immediacy: there is no lag between quantitative and qualitative data collection
• Can be very cost effective since cost incurred in recruitment, travel and focus group facilities can be eliminated
• Ability to do a deep-dive on the story behind the numbers
• Ability to segment qualitative data together with quantitative results

There is no question that qualitative research has come a long way and that all these new techniques make this field exciting and promising, but before you get carried away by all the excitement, don’t forget to have clear research objectives and evaluate if these techniques are a good fit for what you want to accomplish.

To learn more about our consumer data service visit Consumer Shopping Behavior Insights. To request consumer shopping behavior data and insights don’t hesitate to contact us.

In my previous article about how to connect to your customers with the help of research insights, I listed some of the key research questions that any business wanting to grow and succeed should ask. But, how do you do it?

Here we need to make a distinction between data collection methods and types of research based on analytical approach, which are often confused. Data collection methods differ based on whether we want to conduct quantitative or qualitative research.

Qualitative research, which is exploratory in nature, usually uses data collection methods such as focus groups, triads, dyads,  in-depth interviews, uninterrupted observation, bulletin boards, and ethnographic participatory observation.

Quantitative research, which looks to quantify a problem, collects data through surveys in different modalities (online, phone, paper), audits, points of purchase (purchase transactions), and click-streams.

As for types of research, I mean the approaches used to analyze the data collected. Depending of the business objectives, we may decide to gather data to conduct a market segmentation, product testing, advertising testing, key driver analysis for satisfaction and loyalty, usability testing, awareness and usage research, and pricing research, among others.

 When to use each of these data collection methods and types of research depends on the business issues we are dealing with in one or more of four key areas:

• Awareness: Let the market know that the product or service exists
• Targeting: Reach the target segments with the highest profit potential
• Acquisition: Optimize the marketing message, offer,  and price that will close the sale
• Retention: Generate repeat purchases from current customers

The chart below, which we call the Relevant Wheel, shows when it is most appropriate and relevant to conduct different types of research.

Our clients find this chart to be helpful and use it as a reference to determine when a particular type of research is needed. Once this is defined, we discuss the most appropriate qualitative or quantitative data collection methods.

 So next time you wonder what type of research to conduct, I invite you to ask yourself where the particular problem at hand belongs to (Awareness, Targeting, Acquisition or Retention ) and then use this chart to to guide your decision on the most appropriate type of research. I hope you find it useful.

To learn more about our consumer data service visit Consumer Shopping Behavior Insights. To request consumer shopping behavior data and insights don’t hesitate to contact us.

I recently came across the new ad from Domino’s Pizza where they show a clip of focus groups they conducted with consumers about their products. I love it! The message was clear: they listened to their customers. Their management and product teams were brave enough to really pay attention to what customers think. I’ll be eternally grateful to Domino’s pizza for the message sent about the value of market research.

This may not sound as a novel idea, but many, many companies go about their business thinking they don’t need to conduct market research in order to improve their products and grow. They believe they know enough about their industry and product category that there is nothing new to learn. Then there are companies that are barely aware of the importance of research, but see it as an expense and not an investment. They prefer to throw spaghetti at the walls and see what sticks.

I don’t know how many focus groups Domino’s did or if they also used other research methods to test their improved pizzas, but the important thing here is that they were willing to listen to their customers.

Now regarding methodology for new product development, I always advise clients to combine qualitative (e.g. focus groups) and quantitative research (e.g. surveys) methods.

Qualitative research is by definition exploratory, and it is used when we don’t know what to expect, to define the problem or develop an approach to the problem. It’s also used to go deeper into issues of interest and explore nuances related to the problem at hand.

Quantitative research is conclusive in its purpose as it tries to quantify the problem and understand how prevalent it is by looking for projectable results to a larger population.

Here are some guidelines to use both types of research in new product development:

Combining both approaches when developing new products will give you a solid foundation to make the right decisions for your business grounded in consumer insights.

To learn more about our consumer data service visit Consumer Shopping Behavior Insights. To request consumer shopping behavior data and insights don’t hesitate to contact us.