The cost effectiveness of market research with particular application to the search for new product ideas in fast moving consumer goods
Market researchers have long been arrogant enough to believe that market research can find ideas for new products and market segmentation techniques have often been advocated for this purpose. Yet research has proved not cost effective in the initial new product search for the following reasons: 1) consumers are not bristling with needs and do not know what they like till they see it; 2) segmentation techniques have been expensive and difficult to interpret; 3) the results have usually been obvious or not actionable. Criticism of research in idea generation does not remove its need for validation. Following identification of the market opportunity, search for a concept and development of shortlisted concepts, research is most useful in testing the developed concepts which should ideally include a representation of the product and the packaging. If the approach outlined is accepted, there is clearly need for much reorganisation both among clients and among market research organisations. Market research should be more closely integrated into the marketing and financial process of new product development and should be assessed entirely on its cost effectiveness.
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