Market research in relation to business strengths

In Alessandro Di Fiore’s HBR article, “How to Get Past Your Customers’ lies“, he writes about the importance of doing your own market exploration instead of using market research analysts. Or in his own words:

These people have to be smart about business, strategy, and people because they’ve got to be able to spot the really significant behaviors and issues. And the best people to do that are going to be the folks in the top management team… who have the strategic understanding needed to recognize the opportunity and the authority to act quickly on it…

…can’t rely on market researchers and consultants to find the strategic insight for you. Real market research should be a core part of any top executive’s job and they should be going out doing observations and explorative probes of customers…

Steve Jobs has also been quoted as saying that Apple does not conduct market research. Specifically it came from a Fortune article in which he says:

“We do no market research. We don’t hire consultants. The only consultants I’ve ever hired in my 10 years is one firm to analyze Gateway’s retail strategy so I would not make some of the same mistakes they made [when launching Apple’s retail stores]. But we never hire consultants, per se. We just want to make great products.”

However when it comes to market research, it’s also about recognizing your organizations strengths and abilities, and leveraging what you’re good at.

Apple creates markets

For example Apple is strong at creating markets that don’t yet exist, which is often extremely risky and capital intensive, but has a huge pay off if successful. It automatically positions you as a dominating leader in that space and leaves everyone else trying to catch up and copy.

Samsung is the opposite

Try naming one innovative product from Samsung. Not to say they’re not innovators, they’re clearly not known for it.

However they’re the second largest conglomerate by revenue. They wait for others to prove a market exists, and use their strength in being able to copy & refine the idea to produce a high quality product at a low price point causing their competitors to take huge losses when trying to compete with them . Sony-Ericsson took a $317M loss last quarter, Motorola Mobility lost $80M, HTC’s sales have dropped by 41% since Q3 2011. Yet, Samsung’s mobile division sales growth was 300% last year, and aiming to double smartphone sales this year. Yet… they all sell basically the same thing.

Market research is perspective

Market research isn’t truth, it’s just perspective, a piece of information that you can use if you decide to. In Apple’s case, the market research wouldn’t be of much value to them as there’s no market to research – they make markets.

But for Samsung, because of their specific strengths, it’d give them some perspective on what price would people be willing to pay for a device that was similar to the iPhone but didn’t limit them to a particular carrier.

So I agree with Alessandro, in that you have to put on your customers’ shoes and see from your own eyes the opportunities that present themselves. But at the same time I wouldn’t completely discount the perspective that market research can bring, you just need to be cognizant to not let market research potentially blind you from opportunities.