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Breakthrough market discoveries often hide out in latent form
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Latent needs of customers are product or service requirements that customers don’t even know they want, or in some cases are solutions that customers have difficulty envisioning due to lack of exposure to new technologies or being locked in habits and thought processes developed over time. How can businesses gain a fuller picture of the customer's world and how a product or service best fits? A heightened level of understanding and insight can generate the breakthroughs companies need and seek to create a competitive advantage.
One promising possibility is ethnographic research, a technique developed by anthropologists. It's the systematic study of how people go about their daily living. In the business world it means actually observing how customers use products and services and make buying decisions. Ethnography has its origins in anthropology. The word itself holds a clue: 'ethno' means people and 'graphy' means describe. Ethnography takes research to the people, allowing them to describe their world in their own terms and observing them in the home, the office, the car, the supermarket or wherever.
First-hand observation of customers in their own or public environment, interacting with a product or service, delivers a level of insight traditional research methods such as focus groups can't deliver. Ethnography can be invaluable in the early stages of product or service development or rethinking a business process.
[I personally was involved in an ethnographic research project done by a small research firm I was with in the mid-nineties for Marriott Hotels. Marriott management outlined the goals of the study and our small team approached the project under the tutelage of our staff anthropologist.]
When a new product needs testing for consumer reaction, companies traditionally turn to that old market-research mainstay, the focus group. Today, however, alternative techniques offer deeper insights that can inform the product development team with data not available before. Ethnography relies heavily on observation of consumers as opposed to traditional market research which relies more on consumer inquiry. By avoiding structured inquiries, ethnography avoids possible biases in surveys and questions, and minimizes the chance that consumers will provide false information (as some customers are reluctant to criticize and complain about product features directly or discuss emotional and irrational reasons for decisions). Traditional inquiry based market research often fails to capture latent customer needs that can be identified only by observation.
Ethnographic market research is relatively new to marketers, yet is based on the science of anthropology. Using the anthropologist's tool kit of methods and theories, ethnographers are giving corporations an inside look at the cultural trends, attitudes, and lifestyle factors that influence consumer decisions about everything from bathtubs and toothpaste to insurance and batteries. Ethnographic research was often pigeonholed as academic and somewhat mysterious, and thus it had an uphill battle at first. But during the last few years, as marketers have woken up to the idea of really connecting with their customers, ethnography has been steadily gaining traction as a commercial market research tool.
Today, corporations such as IBM, Microsoft, Intel, Pitney Bowes, and Procter & Gamble have in-house ethnographers, while advertising agencies use ethnographic techniques in developing brand strategies for marketers including Home Depot and Talbots.
Ethnographic research is generating buzz in the qualitative research community with typical projects falling in the $20,000 to $300,000 price range. Ethnographic research now represents about 5 percent to 10 percent of the billion dollar plus that businesses spend on qualitative research. Ethnographic research will continue to slowly grow until it takes its place as a standard part of the market research tool kit.
Companies who design everything from household appliances to personal digital assistants are taking a closer look at how people really live. They have realized it's futile to invent technology and then try to convince consumers they need it.
Intel, which helps other manufacturers design goods that run on its Pentium processors, has a team of anthropologists and psychologists who study human behavior. Ethnography has proved so valuable at Intel that the company now employs two dozen anthropologists and other trained ethnographers, probably the biggest such corporate staff in the world. High-tech companies have to date employed the lion’s share of corporate ethnographers.
Procter & Gamble's just retired CEO Alan Lafley, who is credited with turning P&G around in the last several years, had an impressive record for a number of reasons, but it was his approach to market research that set him apart. Throughout his career Lafley was a keen exponent of ethnographic consumer research. To Lafley, the ethnographic researcher simply spends time with consumers and learns from them in their normal environments. He had his ethnographic research teams involved in visiting consumers' houses, often for hours, and asking them to describe their bathrooms and to talk about and demonstrate the products that they use. He understood that his products, like most, are context dependent.
But this level of insight comes at a price and rightly so; it generates an almost unparalleled depth of insight, but it is time and labor intensive and requires a specialist researcher. The data that emerges is often complex, nebulous, and difficult to interpret. The compressed product cycles are also putting pressure on the otherwise lengthy time span that ethnographic research requires. But difficulty should not be a barrier to successful marketing and breakthroughs don’t come easy.
Finally, ethnographic research should be viewed as most valuable when generating questions, not answers. In fact, it's best to think of ethnographic research not as a replacement for other forms of investigation, but as a first step to take before launching into other qualitative or quantitative techniques.
Locally there are three firms that I have found that offer ethnographic market research and if you have more interest in pursuing this please go to: Shugoll Research, Pursuant Research Inc. and Context-based Research Group.
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