Copyright Institute of Directors Sep 2010
Philip Graves, author of Consumer.ology, reviewed on page 17
Market research is an unhelpfully broad term, so letme define it here as asking people questions - something that UK companies spend hundreds of millions of pounds on each year and which I believe is a waste of money.
Organisations have been seduced bythe idea that consumers know what they think and understand what they want. There is little legitimate data to support this notion and an ever-increasing body of evidence that this isn't the case -for example, studies that show purchase choices can be swayed by the presence of a particular smell, type of music or adding in a product option that no one will buy but that changes how they feelabout other choices.
The unconscious mind is in play far more than we realise. This doesn't stop us constructing conscious justifications, or claiming particular attitudes and beliefs. But they are nomore likely to be accurate than our daily horoscope. Leaving aside our capacity to notice only what suits our wishful thinking, that means about half the time.
The value of market research is limitedto what those commissioning it feel that it gives them. It's no better than a placebo, potentially benign, but possibly dangerous if it stops you doing something that would have been more productive.Yet we're not short of examples when research-driven thinking has backfired.
Investment in market research goes beyond a simple waste of money: it corrupts an organisation's ability to learn and, ifthat wasn't damaging enough, can lead to untold waste in the pursuit of strategies and initiatives that would never have been developed with an alternative - and psychologically informed' - approach tounderstanding consumer behaviour.
Rowland Lloyd, vice-president. The Market Research Society
Market research is essential. It informs business strategy and reduces risk in decision-making....