[...]Stop Flying Blind » Blog Archive » 8. Understanding market research[...]…

>>sending your product managers into the real world every once in a while (make it a goal tied to compensation, or they’ll never leave the building

Agreed. Even more than making it a part of compensation, the leaders of the product management team need to set an example by doing some customer visits themselves. Eventually it becomes an accepted norm within the group.

I’ve also seen focus groups misused to test pricing models

Yikes! A coercive atmosphere AND an invalid sample.

I agree with your suggestions on proper uses of focus groups. Good stuff.

I’ve also seen focus groups misused to test pricing models. That NEVER works – ask a bunch of people being paid $50 – 100 to sit around a table and talk what they’d pay for something and they’ll make up whatever number makes the moderator nod his/her head slightly. It’s like the Simpsons episode where Maggie was thought to be a genius because she was following clues Lisa was unconsciously giving her.

Focus groups are best used for getting gut-check reactions to names, brands, and experiences. Some scenarios:

Too often a company gets overly conservative with marketing because they fear customer backlash – a focus group can be used to safely explore possible reactions.

Technology companies often assume far too much about the knowledge or environment a product will be used in. Get a bunch of real people together and discuss home networking, for example, and you’ll discover that asking them to open a port on the router to allow external access presumes that they even know they have a router in the first place.

Considering buying a company for its brand? You might want to see what associations people have with that brand. I was actually part of a focus group convened to screen ads for Zenith plasma HDTVs right after LG bought the company. They got what they wanted in terms of direction on which ad to run, but what struck me as sadly hilarious was that the whole effort was misguided. Zenith was an early HDTV pioneer and had a fair number of patents on the technological underpinnings. The LG people knew this and apparently assumed that everyone else did, too. At the time “LG” had no brand equity whatsoever, while it was clear from the focus group that “Zenith” actually had negative brand equity: several of my focus groupies thought the company had died about 50 years ago. Word associations included “large console radios,” “my grandfather’s TV,” and “old, outdated, but solid.” The moderator asked, “would you buy a Zenith HDTV?” This elicited: “No.” “No.” “Why would somebody use the Zenith name on a Japanese HDTV?” and, after the moderator looked pleadingly towards the glass wall, someone meekly offered “well, if it was a really good TV, sure.”

-avi