Monday, October 13, 2008

Market Research has become only slightly more reliable than crystal ball gazing

Too many companies rely solely on focus groups, whereas they are unreliable for multiple reasons. Market research is only valid if it is replicable. Focus Groups rarely are. They are useful for identifying attitudes, but not for quantifying them. Internet research is always skewed slightly, unless you want to understand the attitudes and behavior of Internet users. In all research claimed behavior is usually different from actual behavior. For example, people claim to take a shower more often than they do, or to wash their hands with soap. Response rates are dropping, sometimes down to single digits. So, even when you ensure that the sample is demographically balanced, you are getting responses from people who have time on their hands.

While we continue to believe that market research is essential, any business person has to be aware of the limitations of the data collection so that it is not over-analyzed, and ends up driving the wrong behavior.

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