Successful entrepreneurs must adapt to an ever-changing business environment.

In addition to
the everyday aspects of running a business, a company has to consider materials, energy
shortages, inflation, economic recessions, unemployment, and technological changes. A
profitable company must also respond to the market with its products and advertising. A critical
tool for measuring the market and keeping competitive is effective marketing research.
Marketing research is about collecting information. While it applies to a wide range of situations,
marketing research gives decision-makers the information they need to find solutions to business
problems, such as the following
How satisfied are customers with your product and service offering?
How will customers react to a decision to change a price or product?
What are service representatives hearing from customers?
What responses to competition will bring you success in a given market?
Simply put, the solution to most business problems can be found through marketing research.
While the foundations of research have existed for thousands of years, technological advances
during the last century have made a wider range of studies possible.
Increased Internet access in the last 15 years has made research available at a much lower cost
and, therefore, more accessible to organizations of all sizes. As a result, the research field has
exploded with new opportunities and methodologies, and organizations have more information at
their disposal than ever before.

FOCUSING YOUR RESEARCH

Marketing research focuses on understanding the customer, the company, and the competition.
These relationships are at the core of marketing research. Companies must understand and
respond to what customers want from their products. However, this relationship is always
influenced by competitors and how their products are received by your market. Thus, you must
clearly identify the customer, company, and competition before developing a research project.

There are several important factors you must consider before you begin, including:
Your customers and competition
Awareness and image of your product
Product usage
Undiagnosed problems with your product
Customer desires and needs for new product development

NEW COKE VERSUS ORIGINAL COKE

In the mid-1980s, the Coca Cola Company made a decision to introduce a new beverage product
(Hartley, 1995, pp. 129145). The company had evidence that taste was the single most
important cause of Cokes decline in the market share in the late 1970s and early 1980s. A new
product dubbed New Coke was developed that was sweeter than the original-formula Coke.
Almost 200,000 blind product taste tests were conducted in the United States, and more than
one-half of the participants favored New Coke over both the original formula and Pepsi. The new
product was introduced and the original formula was withdrawn from the market. This turned out
to be a big mistake! Eventually, the company reintroduced the original formula as Coke Classic
and tried to market the two products. Ultimately, New Coke was withdrawn from the market.
What went wrong? Two things stand out. First, there was a flaw in the market research
taste tests that were conducted: They assumed that taste was the deciding factor in
consumer purchase behavior. Consumers were not told that only one product would be
marketed. Thus, they were not asked whether they would give up the original formula for
New Coke. Second, no one realized the symbolic value and emotional involvement people
had with the original Coke. The bottom line on this is that relevant variables that would
affect the problem solution were not included in the research.

Research Design
Your company has decided to create a smartphone app and the vice president has asked you to be
the team leader. Your teams assignment is to nurture the concept. When you meet with your VP
next week, you will specify the kind of apps your company might develop, determine what the
different apps might do, and focus on your target audience for each possible app.

As your project matures, you understand how important it is to have a research design. Such a
plan will guide your team and your companys decision makers. It will lay out the methods and
procedures you need to employ as you collect information.
To develop a research design, you will rely on three types of studies: exploratory studies,
descriptive studies. Each depends on different information that will help you. No matter how
large or small your project, conducting surveys and establishing a research design is vital to your
success.

Exploratory Studies
First, you need to do an exploratory study. This is the problem finding phase. An exploratory
study forces you to focus the scope of your project. It helps you anticipate the problems and
variables that might arise in your project.
Exploratory studies generally encompass three distinct methods:
1. Literature search
2. Expert interviews
3. Case studies

Descriptive Studies
Who are you selling to? An exploratory study helped you establish what you are selling, but the
descriptive study will help you find your market and understand your customer. Since you will
not be able to sell to everyone, a descriptive study is necessary to focus your project and
resources.
There are different kinds of studies you can implement to better understand your market.
Consider the following descriptive studies:
Market potential: description of the number of potential customers of a product.
Market-share: identification of the share of the market received by your product, company
and your competitors.
Sales analysis: description of sales by territory, type of account, size or model of product.
Product research: identification and comparison of functional features and specifications of
competitive products.

 Promotion research: description of the demographic characteristics of the audience being

reached by the current advertising program.
Distribution research: determining the number and location of retailers handling the
companys products. These are supplied by wholesalers and distributed by the company.
Pricing research: identifying competitors prices by geographic area.

NIVEA DEODORANT

The research team felt therefore there was not enough recent knowledge about the consumer in
the secondary research. They commissioned some primary qualitative research in key markets
(Germany, France, UK and USA). This was aided by the local Market Research Manager. The
aim was to understand the motivations for using deodorant amongst the female consumer.
Primary research is used when there is no existing data available to answer your questions. The
research involved small discussion groups of females. This helped researchers understand the
beliefs and motivations of this group. There were several main findings:
There is steady growth in females shaving. They wanted to look after their underarms
throughout all seasons (not just in summer).
Women cared increasingly about the condition of their underarms.
Women desired attractive, neat underarms. This symbolized sensuality and femininity.
The deodorant segment remained focused on functional rather than beautifying products.

The market research revealed an unexplored market potential for NIVEA Deodorant. The brand
did not have a specific product that addressed underarm beauty for the female consumer. No
direct competitor was offering a product to meet these needs. So there was a clear opportunity to
develop a new product. This would fit across different markets and with the current NIVEA
Deodorant range.

Turning consumer insights into product concepts

Consumers showed a need for a beautifying, caring deodorant. The team generated ideas on
how to address the consumer need. From these ideas the marketing team created product
concepts. These describe the product benefits and how they will meet the consumer needs.
Several concepts were written in different ways. These explained and expressed unique product
attributes.
The company needed to know which concept was preferred by prospective consumers. It carried
out market research to test whether the concepts would work. The research was conducted
amongst the desired target market. For Pearl and Beauty, the desired target market was 18-35
year-old women who were beauty-orientated, followed fashion and looked for products with
extra benefits.

Quantitative research on the concept was carried out in two test markets (France and
Germany). An international company like Beiersdorf must test products in more than one market
to assess properly the global appeal. The concepts were tested monadically. Monadic testing
means that the respondent of the test is only shown one concept. This stops the respondent being
biased by seeing many variations of the same product concept.
A number of criteria were used to test the concepts:

1) Deodorant category performance measures. These included wetness, dryness, and fragrance.
The new concept must deliver generic core benefits.
2) Product attributes specific to the new product and NIVEA core values. The new
Pearl and Beauty product has additional benefits to a regular deodorant. For example, it leaves
your skin feeling silky and gives you beautiful underarms. Consumers needed to understand and
see these benefits.
3) The product needed to be relevant and motivate a consumer to purchase it.
The team chose the winning concept. This best conveyed beauty while remaining relevant to
the deodorant category and NIVEA brand.
Next the research team tested various name ideas for the product and developed different designs
for the packaging. Packaging design plays a very important role in helping to communicate the
image of the product. Pearl and Beauty needed to communicate femininity and sophistication.
Pink was a natural color choice for the packaging. They also used a soft pearlescent container to
emphasize the pearl extracts in the product.
Various design ideas were tested using quantitative market research. In addition, this helped to
predict the volume of the new products that would be sold, the optimal selling price and the level
of switching from existing NIVEA Deodorant and competitor products.

Conclusion
New product development should start with an insight based on consumer needs. Throughout the
NPD process, market research is a valuable tool for Beiersdorf to check viability and minimize
the risk of the product launches.
Being an international company, it is essential that Beiersdorf develops new products using the
insights of consumers across markets and cultures. This ensures the products are relevant to a
large number of global consumers and will deliver the maximum return when launched. This
maximizes return on investment for the company and results in happy, satisfied and loyal
consumers.