It is the task of marketing professionals to find out what the needs of consumers are and to produce goods that meet those needs. An apparently simple and unambiguous principle that cannot be over-emphasised, even in ’Marketing for dummies’. However, there are many marketing professionals who do ignore it. Marketing consultancy Beagle, together with the University of Amsterdam (UvA), carried out research into the innovation policy of leading brands. It seems putting theory into practice is not easy.
’Principles of Marketing’ by Kotler could be described as the marketing bible. The first chapter is entitled ’Meeting human needs’, in other words, satisfying the wishes of consumers. It is the task of marketing professionals to establish as clearly as possible what consumers’ needs are and to make products to match those needs, according to Kotler. A simple case of two plus two equalling four, you might think. In her study, ’The consumer orientation of product innovations’, carried out for Beagle and the UvA, communication scientist Emilie Milders shows that the day-to-day reality of the marketing manager does not tally with this idealistic image.
Copying
Milders’ research is subtitled "To what extent do marketing professionals in the Netherlands ensure that product innovations match the needs of consumers?" To get an answer to this question, Milders asked one hundred and twenty marketing managers employed with leading brands about their marketing and innovations policy. A crucial aspect of this was the emphasis on consumers as opposed to emphasis on the activities of the competition. Many of the companies that were looked at appear to run their innovation policy on the basis of what their competitors are up to. This strategy is most visible in the area of copying competitors’ products. Many companies see product imitation as a very cost-effective way of innovating. Any business that is first to successfully launch a new product on the market bears all the associated costs and risks. The imitator, on the other hand, has low overhead costs, a low degree of financial risk and a guaranteed increase in turnover. "Sometimes the competition has a success and you want to copy that as quickly as possible. However, the competition can also make our own introductions less successful, because they have a better introduction policy. We keep tabs on each other all the time", according to one respondent. Many producers work on this principle. The competitor’s basic product sells well, so all the copier has to do is change the flavour or the packaging and – bingo! – we’ve developed a ’new’ product; that’s the general idea. In other words, the motto ’better to properly thieve than to badly conceive’ is still very much alive in the marketing profession.
The motto ’better to properly thieve than to badly conceive’ is still very much alive in the marketing profession
Not so simple
The next question asked by Milders was why managers apply this policy. Why do they not stick to the most elementary law of marketing that says that you should find a need among consumers, develop a product that meets that need and launch that product onto the market. If only it were so simple. The research has shown that the plans of many marketing managers are ambitious enough, but that in practice they quickly fall by the wayside. They would like to involve consumers in developing new products, the only question is how.
Marketing professionals stumble on all kinds of practical problems that can prevent them involving consumers in the product development phase. First, the participants in the research are aware that they have little faith in the ability of consumers to make a valuable contribution. One respondent declared, "you won’t get much in terms of renewal from consumers, because they all think within their own field of reference. The most you can do is ask consumers what they feel is missing at the end of the whole process." Another stated: "you can generate an insight (...) into innovations in all kinds of ways, but the odd thing is that consumers do not have many ideas, they just regurgitate existing ideas." Forty per cent of the managers who were surveyed also believe that consumers are only able to assess end products, not abstract product concepts. They think that consumers should only be used at the end of the process, as a final monitoring tool. All of which are important considerations in not involving the ’man in the street ’in product development.
Large-scale campaign
Second, the level of practical consumer research is often below par. Almost half of the respondents admitted that budget cuts affect consumer research first, rather than the introduction of the product. Provided enough is invested in large-scale promotional campaigns for a new product it will succeed - at least, that’s the theory. So the decision is made to allocate budget resources to the end of the process. At the same time, the marketing professionals in the survey think that consumer research always takes a lot of time and that it will be several months before they have enough information to go on. In addition, the various research methods and the interpretation of the results form a problem. Milders shows that marketing managers have difficulty in separating quantitative and qualitative data and often draw conclusions based on data that is incorrectly interpreted.
When looking at these obstacles, it is hardly surprising that the Dutch marketing industry is just putting each other’s products on the photocopier. It is infinitely easier to keep an eye on the competition than on consumers. Why bother with all those seemingly expensive and endless procedures without knowing what the end result will be, when you can have a ’new product’ at the press of a button?
Digging your own grave
The answer is that you’ll end up digging your own grave by bluntly copying the competition. Because in the field of product development there are opportunities for consumer research. The decision to copy the work of the competition should not be taken so readily. One of the prime arguments put forward by the marketing managers in the survey was that consumers are not able to make a worthwhile contribution to the development of a new product. This undervaluation, which represents a serious breach of the unwritten laws of marketing, leads those in the marketing business to work according to their own gut feeling. They assess their own products and product proposals using their own personal criteria. In other words, it’s the marketing professionals - and not the consumers, as pointed out by a respondent - who launch a product line on the basis of their own terms of reference and without the fresh input of an outsider. But it is precisely unbiased consumers that are needed to provide that fresh input. After all, they are best placed to articulate their personal needs, dreams, wishes, frustrations and opinions. In other words, consumers can be a rich source of inspiration, as long as you are prepared to take them seriously.
The second argument put forward by marketing professionals is that consumer research is too expensive an undertaking. They reckon success can be generated with the help of an all-conquering introductory campaign. This financial focus on the final phase is often at the expense of the thoroughness of the start of the innovation process, even though this may be the most decisive phase in the development of a product. Without the value of consumer insight obtained through proper research, the chance of success is considerably reduced, no matter how polished the introductory campaign. A thorough survey can easily be carried out for the price of a thirty-second television advertising slot or a whole-page newspaper advertisement. By transferring just a fraction of the budget from the introductory phase to the concept development phase, the risks associated with product innovations can be greatly lessened while the chances of ultimate success are improved.
Argument three, the difficulty in interpreting data, can be refuted by pursuing a critical analysis of the data. There is a lot of information to be gleaned ’between the lines’: it’s just a question of channelling it, filtering it and putting it into clusters. Conclusions based on quantitative and qualitative data should be carefully distinguished and not just taken as read. You need to strip off all the distracting outer layers in order to get the answer to the question, ’what does the consumer really think?’ This is the way to gaining a unique and substantial consumer insight that will serve as the basis for product ideas that are relevant to consumers. Not by underestimating consumers or acting upon your own prejudices.
For the price of a thirty-second television advertising slot or a whole-page newspaper advertisement, a thorough consumer survey can easily be carried out that drastically reduces the risk of a flop
Cosmetic
Anyone who, in spite of these arguments, persists in ignoring consumers and continues to believe in the practice of copying their competitors, has to realise that in the long run, it is unsustainable. Because, what are you copying exactly? What are the insights that lie at the basis of the product? Are you sure that the product you are copying satisfies the needs of consumers and therefore has market potential? If everyone just watches everyone else, there will never be any new products, only imitations with the occasional improvement or additional feature here and there. The consequence of that will be that consumers will not be interested in such cosmetic modifications. Brand loyalty that has taken years to win will be simply thrown away. Your brand’s values will not be supported with your own goods but through a product made by your competitors. It will be just as easy for a consumer to choose a competitor’s product off the shelves, as the differences will have been eradicated and loyalty for your brand will have disappeared.
Then there’s also the growing power of private labels. Supermarket concerns are much better equipped for quickly and easily copying what the leading brands are bringing on the market. They often have prior knowledge of what the big players are about to introduce, and they can pitch their prices just below those of the leading brands, as well as give their own products pride of place on the shelves. For consumers it will not matter if the product is from a well-known manufacturer or the supermarket’s own brand - after all, everything tastes the same, smells the same and works in the same way.
Philip Kotler once said, "followship is not a rewarding path." It is only those who keep an ear out for what consumers are saying who can take the lead. They leave the temptation to copy far behind.
The research
Emilie Milders conducted her research with the help of 120 respondents employed in a marketing, sales or communication department of a leading brand. In a quantitative survey they were given a list of questions about their innovation policy. Milders then carried out ten in-depth interviews of marketing managers to find out about the motives for their policies. The qualitative research took place at the ten biggest FMCG-companies