We live in the experience economy, meaning brands no longer only compete on the quality of their products but also their impact on consumers. In the experience economy, experiences are first, products and services second.

First coined by economists B. Joseph Pine II and James H. Gilmore in 1998, the experience economy describes an economy where “goods and services are sold by emphasizing the effect they have on people’s lives.” 

In the experience economy, customer experience (CX) and user experience (UX) has become a critical differentiator for brands that get it right. However, Pines makes an important point when he says most brands equate CX to good service, which is good, “but rarely does it rise to the level of memorability.”

A brand may do a great job of making things easy and convenient for consumers, which is ideal, but it needs to create a distinctive memory to be considered a memorable experience. 

There have been shifts in consumer behaviour, and they will purchase experience over material things. This is especially true for Millennials and Gen Zers. Psychologists have a good explanation for this shift. They believe experiences make people happier over the long term than material things. This is because experiences stay in our memories longer, give us better stories than material things, and help us form meaningful social connections and relationships that are key to happiness and health. For this reason, brands that nurture human experiences will grow faster than their competitors, who do not build unique, memorable events. 

The importance of building a customer-centric business.

According to studies, customer-centric brands are 60 percent more profitable than those not focused on the consumer’s needs and wants. 

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Research also shows that 74 percent of consumers are likely to buy based on experiences alone. The good news is that most companies and business leaders (89 percent) consider customer experience to be directly linked with loyalty and retention. However, only about 20 percent believe these brands to be customer-centric. Studies show a gap between brand promise and customer experience because organizations focus more on brand awareness. The reality of the market today is that brand experience management helps improve brand awareness. 

So, what exactly is brand experience management?

Brand experience management refers to the discipline of managing, strategizing, measuring, controlling, and influencing every aspect of customer engagement and interaction with a brand. 

Brands that get experience management right see higher revenues, stronger brand resonance, and happier, more loyal customers. In today’s marketplace, organizations have less time, more communication channels, and tighter competition, so brand experience management is essential to cut through the noise. It also aligns with your brand’s promise to match the customer experience. It can close the gap between the brand’s promises and the customer’s actual experiences. 

Disney is, without a doubt, one of the earliest examples of brand experience management. 

Disney has an impressive lineup of products and services that deliver exceptional brand experiences, including theme parks, movies, merchandise, and media content. 

The brand has garnered a loyal following by creating immersive and engaging experiences and content across multiple touchpoints.

For instance, as guests enter Disney theme parks, they are instantly transported to a magical world with the type of memorable experiences Pines refers to in his definition of experience management. Disney’s unwavering attention to detail in every project and engaging storytelling contribute to its brand value and experience. Disney also transcends generations in its appeal and has a loyal consumer base across all ages.  Disney’s consistent emphasis on creating a customer-centric brand and delivering an exceptional experience has made it the ultimate example of brand experience management.

Organizations need to move from brand management to brand experience management to win over consumers looking for a sweet spot between value, quality, convenience, and emotional experience. 

Where is the experience data to manage brand experience?

To manage experience data, brands need reliable, real-time experience data to show how customers feel about your brand (in the moment) and identify any experience gaps. Markets move quickly, and when brands collect old and outdated data, it doesn’t help them make the right decisions. 

Examples of brands getting it right.

Brands are working hard to ensure they delight their customers and never disappoint them because they understand how a great customer experience can build or break their brand, directly impacting brand value, customer loyalty, and revenue. 

The Heineken Experience in Amsterdam is an excellent example of how a brand can create memorable experiences. Through its self-guided tour, visitors get an inside look at the beer brand and learn about its heritage, history, brewing process, and innovations and get a taste of the beer. 

The building has more than 1,000 visitors a day.

Companies in the service industry are at the forefront of the experience economy. Restaurants are playing with themes and recipes to add that layer of experience wherever they can. 

Le Petit Chef, a culinary experience, is an example of a brand taking it to the next level. Using visual mapping technology, the world’s smallest chef “cooks” your food on your table. 

Photo credit: herfavfood.com

Although like any restaurant, the actual dish is prepared in the kitchen by real staff, guests are treated to an immersive show with custom animations. The animation on the table varies based on the story, but the tabletop transforms into a landscape and features Le Petit Chef working hard to grow your food, prepare it, and put it on your plate.

How can brands develop and measure their CX through research?

Define what the ultimate experience should be.

Brands that create excellent customer experiences first define what that experience looks like and work backwards. Once a brand understands what it wants to be known for, it can then initiate the values and strategies to achieve that vision. 

CX is an organization-wide function. 

CX continues beyond the leadership level. Business leaders must communicate the vision to everyone in the organization. Everyone should be excited about the CX’s why, what, and how, as defined by the brand, from IT to sales, marketing, and Human Resources. 

Metrics used to measure CX

There are five broad types of research used to measure CX. 

  1. Customer satisfaction (CSAT). This is the best place to start, as CSAT captures survey questions explicitly asking about satisfaction or measures implicit metrics, such as reviews, ratings, delivery statistics, or mystery shopping scores.
  2. Advocacy/reputation/brand. These metrics are important because they show how willing customers would be to recommend a product, service, or brand to others. Social media sentiment scores, online reputation, trust scores, and event participation are good ways to gauge these metrics.
  3. Consumer loyalty. Customer retention and churn are more retrospective and measure the average consumer engagement period. They can also show the likelihood of a customer staying with a brand. These can be measured through loyalty program participation levels, buying frequency, loyalty program participation, average order size, and repeat orders.
  4. Employee engagement. Customer experience has to be an organization-wide effort. Many organizations ignore this important metric. Employee engagement is a significant concern in providing CX advancements.
  5. Brand promise and customer experience gaps. When a product or service does not align with the brand promise, the customer experience is poor, no matter what.
     

Putting experience insights into action.

Brands need suitable systems in place to pull the experience data so it can lead to insightful action. With the appropriate procedures in place, brands can immediately apply the insights they get from their data to action. For this to happen, customer feedback should be directed to the right people. This feedback is looked at with sales data and marketing spending so business leaders can connect the dots and measure the impact of their initiatives. 

When everyone in the organization is responsible for brand experience management, and systems are in place along with real-time data, the organization develops a brand experience mindset, which leads to long-term growth. 

Kadence International helps leading brands make game-changing decisions. If you are looking for a research partner to help better understand your customers, we would love to help. Fill out our Request for a Proposal here.

Biometrics refers to identifying individuals based on their unique physical or behavioural characteristics, such as fingerprints, facial recognition, voice recognition, and iris recognition. By utilizing biometrics, companies can gain valuable insights into consumer behaviour, leading to more informed marketing decisions and improved strategic outcomes.

The market size of the biometrics industry is growing rapidly, with projections for continued growth in the coming years. According to a report by MarketsandMarkets, the global biometrics market size was valued at $17.76 billion in 2019 and is expected to reach $69.28 billion by 2024 at a compound annual growth rate (CAGR) of 31.3% during the forecast period.

In terms of functionality type, the biometrics market is segmented into fingerprint recognition, facial recognition, iris recognition, voice recognition, and others. Fingerprint recognition is the largest segment, accounting for a significant market share, followed by facial recognition.

Growth expectations for the biometrics market in the next 5 to 10 years are positive, with an increasing demand for biometric technologies in various industries, such as government, finance, healthcare, and consumer electronics. The growth is driven by factors such as increased security concerns, the adoption of biometric technologies for authentication and identification, and the increasing use of biometric technologies in mobile devices and wearable devices.

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In market research, biometrics can be used in several ways, including:

  • Measuring consumer engagement and emotions towards specific products or advertisements.
  • Assessing preferences and attitudes towards different products, brands, and advertisements.
  • Personalizing marketing messages and experiences based on consumer behaviour, preferences, and emotions.
  • Improving the accuracy of consumer data by combining biometric data with traditional market research methods.
  • Evaluating the effectiveness of marketing campaigns and advertisements.

Biometrics in market research can be considered both quantitative and qualitative. On the one hand, the biometric data collected is often numerical, such as heart rate, eye-tracking patterns, or skin conductance levels. This numerical data can be analyzed using statistical methods and provide a quantitative measure of a participant’s physiological response.

On the other hand, biometrics can provide qualitative insights into a participant’s emotions and attitudes. For example, researchers can use biometrics to measure changes in physiological responses as a participant views different advertisements, products, or brand messages. These changes in physiological responses can indicate how the participant feels about the content they are viewing.

Even though tastes and preferences are individual and subjective, biometrics can provide valuable insights into intentions and emotions that can help brands develop better products. By measuring physiological responses, such as facial expressions, eye movements, heart rate, and skin conductance, biometrics can provide a more objective understanding of consumer reactions to products, advertisements, or packaging.

For example, a brand might use biometrics to test the effectiveness of different product packaging designs or advertising campaigns. By measuring participants’ physiological responses as they view different designs or advertisements, the brand can gain insights into which designs elicit the strongest emotional responses and are, therefore, more likely to be successful with consumers.

Similarly, biometrics can test the sensory attributes of food and beverage products, such as flavour, texture, and aroma. By measuring participants’ physiological responses as they taste different products, brands can gain insights into which products are most appealing and preferred by consumers.

What types of technology are available for biometric research?

The types of technology used in biometrics market research include:

  1. Facial recognition technology uses cameras and software to analyze facial expressions and emotions, such as smile intensity and eye movements.
  2. Electroencephalography (EEG) technology uses electrodes placed on the scalp to measure brain activity, providing insights into consumer engagement and attention levels.
  3. Galvanic Skin Response (GSR) technology measures changes in skin conductance, which is related to the activity of sweat glands and is used as a measure of emotional arousal.
  4. Eye-tracking technology uses cameras and software to track eye movements and gaze patterns, providing insights into where participants are looking and focusing.
  5. Heart rate variability (HRV) technology measures changes in heart rate and assesses emotional states such as excitement, stress, and anxiety.

What are the advantages of biometrics?

Using biometric technology has several advantages over other forms of market research, including:

  1. Objectivity: Biometrics measures physiological responses, which are less susceptible to conscious or unconscious bias than self-reported data, such as surveys or focus groups.
  2. Real-time feedback: Biometrics can provide real-time feedback about participant responses to products, advertisements, or other stimuli, allowing researchers to gain insights into consumer behaviour more quickly and accurately.
  3. Non-intrusive: Unlike traditional research methods, such as surveys or interviews, biometrics does not rely on self-reported data, which can be affected by social desirability bias.
  4. Ability to detect unconscious reactions: Biometrics can detect unconscious reactions that may be difficult to uncover through other research methods, such as implicit biases or emotions that are not consciously acknowledged.
  5. Improved accuracy: By combining multiple physiological measures, such as heart rate, skin conductance, and facial expressions, biometrics can provide a more accurate picture of participant reactions to products or advertisements.
  6. Complementary to other research methods: Biometrics can complement other research methods, such as surveys or focus groups, by providing objective data to support or challenge findings from these other methods.
  7. Flexibility: Biometrics technology can be used in various research settings, including in-person, remote, or mobile studies, making it a flexible tool for market researchers.

What are the limitations of biometrics when conducting research studies?

While biometrics has many advantages, it is important to note that it is not a perfect research method and can have limitations, such as technical issues or participant discomfort. Brands should carefully consider the advantages and limitations of biometrics and use it in conjunction with other research methods to gain a comprehensive understanding of consumer behaviour.

While biometrics can provide valuable insights into consumer behaviour and preferences, it may only be suitable or relevant for some industries.

Industries that commonly use biometrics in market research include:

  1. Consumer goods: Companies that manufacture and sell consumer goods, such as food and beverages, personal care products, and home appliances, use biometrics to better understand consumer preferences and emotions towards their products.
  2. Technology: Companies in the technology industry, such as smartphone manufacturers and software companies, use biometrics to evaluate consumer engagement and satisfaction with their products.
  3. Advertising and media: Advertisers and media companies use biometrics to measure consumer engagement toward advertisements and determine campaign effectiveness.
  4. Healthcare: The healthcare industry uses biometrics to assess consumer engagement and emotions toward medical devices, drugs, and other healthcare products.

Industries that may not benefit from biometrics market research include:

  1. Industries with low consumer engagement: Industries with low consumer engagement, such as B2B businesses and industrial goods, may not benefit from biometrics research as the insights gained would not be relevant to their target audience.
  2. Industries with limited technology access: Industries with limited technology access, such as rural areas, may not benefit from biometrics market research as the necessary biometric sensors and technology may not be available.
  3. Industries with privacy concerns: Industries that handle sensitive information, such as the financial and legal industries, may not benefit from biometrics market research due to privacy concerns and regulations surrounding the use of biometric data.
  4. Industries with low consumer participation rates: Industries with low consumer participation rates, such as luxury goods, may not benefit from biometrics market research due to the limited pool of data available.

While biometrics can provide valuable insights, companies must also consider the five disadvantages or limitations below:

  1. Privacy concerns: The use of biometric data raises concerns about the privacy of consumer information and the potential for misuse.
  2. Technical challenges: Biometric sensors can be expensive and may require specialised technical expertise to use effectively.
  3. Inaccurate data: Biometric data can be subject to errors and inaccuracies, leading to incorrect conclusions.
  4. Limited applications: Biometrics may only be suitable for some types of market research and may not provide relevant insights in certain situations.
  5. Resistance to adoption: Some research participants may resist using biometric technology, leading to low participation rates and a limited data pool.

How inaccurate is biometric technology when used in market research?

Biometric technology can be inaccurate. 

One of the earliest forms of biometrics is a polygraph test. A polygraph, also known as a lie detector, measures physiological responses to questions to determine if a person is telling the truth. However, polygraphs are not considered 100% accurate, and the results are generally not admissible in court due to their inherent limitations and the potential for operator bias.

Even so, brands should still consider biometrics as a viable form of market research for several reasons. Firstly, biometrics technology has advanced significantly in recent years. Many modern biometric methods, such as facial recognition and eye tracking, are considered more reliable than older methods, such as polygraphs. Secondly, while polygraphs are often used in forensic or legal settings where accuracy is critical, the purpose of biometrics in market research is usually to gain insights into consumer behaviour and preferences, where the focus is less on accuracy and more on identifying patterns and trends.

Also, biometrics technology can provide a more natural and non-invasive method of collecting data than traditional survey methods and provide insights into unconscious or implicit responses that may not be captured through self-reported data. This can lead to more meaningful and actionable insights for companies and brands looking to improve their products and marketing strategies.

Some of the factors that can impact the accuracy of biometric data include the following:

  1. Technical limitations: Some biometric technologies, such as facial recognition, can be impacted by lighting conditions, camera quality, and the position and orientation of the participant’s face.
  2. Interference from external factors: Biometric sensors can be impacted by external factors, such as movement, sweating, and changes in skin conductance.
  3. Participant bias: Participants may alter their behaviour or emotions in response to being monitored, leading to inaccurate data.

There have been instances where biometric technologies, particularly facial recognition, are less accurate for specific racial and ethnic groups. Studies have shown that facial recognition technologies are less accurate in identifying individuals with darker skin tones, leading to a higher rate of false positive identifications. Similarly, there have been instances where facial recognition technologies are less accurate in identifying individuals from certain racial and ethnic groups, such as Asian and African Americans. 

Racial bias in biometrics is a genuine concern. Some biometrics technologies, such as facial recognition algorithms, have been shown to have higher error rates for people with darker skin tones or those from different racial or ethnic backgrounds. For example, a 2019 MIT and Stanford University study found that three commercially available facial recognition algorithms had higher false positive rates for people with darker skin tones than those with lighter skin tones.

By taking the following steps, researchers can reduce the risk of racial bias in their biometric market research studies and ensure that their findings are accurate and representative of the populations they are studying.

  1. Use diverse data sets: When developing or testing biometric algorithms, researchers should use a diverse data set that includes people from different racial and ethnic backgrounds to ensure the algorithms accurately measure physiological responses across a wide range of populations.
  2. Validate results: Researchers should validate their findings by comparing biometric data to other forms of data, such as self-reported data, to ensure any biases are identified and addressed.
  3. Be transparent: Researchers should be transparent about their methods and results, including any limitations or limitations of the technology used.
  4. Work with experts: Researchers should work with experts in biometrics to ensure their study design and results are valid and reliable.
  5. Continuously monitor and update: Researchers should constantly monitor and update their biometric algorithms to ensure that they are free from racial biases and accurately capture physiological responses across diverse populations.

In addition, by following the following best practices, researchers can increase the accuracy of the data collected from biometrics studies and gain more reliable insights.

  1. Use validated, and reliable biometric technologies: Researchers should choose biometric technologies that have been validated and are known for their reliability and accuracy.
  2. Control for external factors: Researchers should ensure that the environment and conditions during the study are consistent and controlled for external factors that could impact the data collected.
  3. Use multiple biometric technologies: Researchers can use various biometric technologies, such as facial recognition, EEG, and heart rate variability, to cross-validate the data collected and increase the accuracy of the insights.
  4. Ensure participant comfort: Researchers should ensure that participants are comfortable and relaxed during the study, as stress or discomfort can impact the accuracy of the data collected.
  5. Use statistical analysis to validate the data: Researchers can use statistical analysis techniques, such as regression analysis and hypothesis testing, to validate the data collected and ensure its accuracy.

How can researchers address privacy concerns when collecting biometric data?

Market researchers can help reduce privacy concerns and build trust with participants by taking these steps. It is also crucial for researchers to stay up-to-date with relevant privacy laws and regulations, such as the General Data Protection Regulation (GDPR) in Europe, to ensure that they follow best practices for privacy protection. 

The following steps should be actioned when conducting any research study, including biometric market research.

  1. Obtain informed consent: Participants should be fully informed about the study and what data will be collected and allowed to opt in or out of the study. Participants should also be informed about who will access their data and how it will be used.
  2. Secure data storage: Companies should store participant data securely using encrypted databases and secure file transfers. They should also have appropriate security protocols to prevent unauthorised access to participant data.
  3. Data protection and privacy policies: Companies should have clear data protection and privacy policies outlining their practices for collecting, storing, and using participant data. Participants should be informed about these policies and be able to access them if they have questions or concerns.
  4. Data anonymisation: Researchers should consider anonymizing participant data whenever possible by removing personally identifiable information (PII) from the data set. This helps to protect participant privacy while still allowing the data to be analyzed for research purposes.
  5. Data destruction: Brands should have a plan to destroy participant data when it is no longer needed. This helps to prevent participant data from falling into the wrong hands and being misused.

How to run a biometrics study

When conducting biometrics research, the appropriate sample size will depend on the specific research question, the technology used, and the desired level of precision. Generally, a sample size of at least 50 participants is recommended for biometrics market research, although larger sample sizes may be necessary for more complex studies.

The typical steps taken when conducting a biometrics market research study include:

  1. Defining the research question and objectives
  2. Selecting the appropriate biometric technologies
  3. Recruiting and screening participants
  4. Running the study and collecting data
  5. Analyzing the data
  6. Interpreting the results and drawing conclusions
  7. Reporting the results

The timeline for each stage can vary depending on the complexity of the study, the technologies used, and the sample size. For example, a simple biometrics study with a small sample size and a single biometric technology may take several weeks. In contrast, a larger, more complex study with multiple biometric technologies may take several months.

The duration of the actual biometrics study can also vary widely depending on the specific research objectives and the study’s complexity. A simple biometrics study with a small sample size and a single biometric technology may take several hours to complete. In contrast, a larger, more complex study with multiple biometric technologies and a large sample size may take several days or weeks.

When recruiting participants for a biometrics study, there are several strategies that brands can use:

  1. Online panels: Online panels are a popular option for recruiting participants for biometrics studies. Brands can use online panel providers to reach a large, diverse pool of participants and target specific demographics or psychographic groups.
  2. Social media: Brands can use social media platforms, such as Facebook, Twitter, and Instagram, to reach a large and diverse audience and recruit participants for biometrics studies.
  3. In-person recruitment: Brands can also recruit participants for biometrics studies in-person, such as at shopping malls, trade shows, or other public events.
  4. Employee recruitment: For internal biometrics studies, brands can recruit employees as participants. This can be an efficient and cost-effective way to recruit participants, as well as a way to build support and engagement among employees.

Regardless of the recruitment strategy used, brands need to communicate the purpose of the study and the compensation offered to participants to ensure that participants are well-informed and motivated to participate. 

Participants in biometrics research studies are typically compensated for their time in various ways, including cash, gift cards, merchandise, or reward points. The exact compensation offered to participants will depend on several factors, including the duration of the study, the level of effort required of participants, and the target audience.

For example, suppose the study involves a simple task that takes only a few minutes to complete. In that case, participants might be compensated with a small cash incentive or a discount on products. Participants might be offered a larger cash incentive or a gift card to a popular retailer for longer or more complex studies requiring a more significant time commitment.

In some cases, participants might be compensated with additional benefits, such as early access to new products or the opportunity to participate in exclusive events or promotions.

Before embarking on a biometrics market research study, a brand should consider the following:

  1. Objectives: Clearly define the research objectives and the information the study intends to gather. This will help determine the type of biometrics technology to be used and the most appropriate research design.
  2. Study design: Consider the study design, including the sample size, recruitment process, and data collection methods. The design should be appropriate for the research objectives and provide a representative sample of participants.
  3. Expertise: Consider the expertise of the market research firm or team conducting the study and their experience with biometrics technology and research methods.
  4. Technology: Evaluate the biometrics technology, including its accuracy and reliability, and ensure that it is appropriate for the study objectives.
  5. Privacy and consent: Ensure that privacy concerns are addressed and that participants are fully informed about the study and the data collection process. Obtain informed consent from participants and comply with relevant privacy regulations.
  6. Budget: Consider the cost of the study and ensure that the budget is appropriate for the research objectives and the technology used.
  7. Data analysis and interpretation: Consider the data analysis and interpretation methods to be used and ensure they are appropriate for the research objectives.

An example of a biometrics research study using a new flavour of soft drink could be as follows:

  1. Participants are recruited and asked to taste the new flavour of soft drink while wearing biometric sensors that measure their physiological responses, such as heart rate, skin conductance, and facial expressions.
  2. The biometric data is analyzed to determine the participants’ emotional responses to the new flavour, including excitement, happiness, and pleasure levels.
  3. Participants complete a traditional survey to rate their enjoyment of the new flavour and provide feedback on its taste, aroma, and appearance.
  4. The data from the biometric sensors is compared to the results of the survey to determine if there is a correlation between the participants’ physiological responses and their self-reported enjoyment of the new flavour.
  5. The study results are used to inform decisions about the marketing and distribution of the new flavour, including target demographics, pricing, and promotional strategies.
  6. The insights gained from the biometric data can also be used to improve the formula and packaging of the new flavour, helping to ensure its success in the marketplace.

Why should a brand outsource its biometrics research study?

Outsourcing a biometrics market research study has several potential benefits, including:

  1. Expertise: Outsourcing to a specialised market research firm can provide access to experienced biometrics professionals with the expertise and knowledge to conduct the study effectively.
  2. Cost savings: Outsourcing can help reduce costs associated with the study, as the research firm can leverage its existing resources and technology to minimise expenses.
  3. Time savings: Outsourcing the study can free up time and resources that can be devoted to other aspects of the business.
  4. Access to cutting-edge technology: Outsourcing to a market research firm specializing in biometrics can provide access to the latest technology and tools for conducting the study, ensuring that the data collected is accurate and reliable.
  5. Focus on core business: Outsourcing the study allows the company to focus on its core business activities rather than dedicating time and resources to conducting the study internally.

Choosing the right market research agency is essential, as not all market research firms have the same level of expertise or experience in conducting biometrics research. Kadence International has more than 30 years of global market research expertise and would welcome the opportunity to discuss your next biometrics research project.

Emerging Trends in the Global Beverage Industry is an in-depth guide providing insights into key trends shaping the alcoholic beverage category in the U.S., U.K., Singapore, Japan, Indonesia, China, Thailand, Vietnam, and the Philippines, with examples and case studies from leading global brands. 

This report is for beverage brands, retailers, distributors, investors, bars, restaurants, and anyone in the business of quenching a consumer’s thirst for innovative beverages.

This is a summary of all five emerging trends in the report and how brands globally keep up with dramatic shifts in consumer tastes and preferences and the stiff competition in the beverage industry.

Trend 1: Booze without the buzz. 
The rise of no-to-low alcohol

As younger generations shun alcohol or reduce consumption, the low-to-no-alcohol (LNA) trend is here to stay.

Moderation, health, wellness, and a thirst for innovative flavours drive growth in this sub-category, and consumers are willing to pay for high-end innovative, non-alcoholic spirits.

Download the full report to find out how much the millennial share of alcohol drinkers has dropped in just one year.

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Apart from big brands, the global market is deluged with new, independent entrants. Read the full report to discover the brands in the LNA category and how they are responding to the sober curious movement.

Also, read the case study of a brand that sowed the seeds for the LNA category. 

Trend 2: Spirit-based ready-to-drink beverages.
RTDs create a stir in the beverage industry

The demand for RTDs continues to grow, especially among younger consumers.

Variety, taste, and convenience are driving demand. The category includes hard seltzers, canned wines, ready-to-drink cocktails, hard coffee, hard tea, kombucha, wine spritzers, and coolers.

Download the report to discover why RTDs cater to the millennial lifestyle and how brands are delivering. Also, learn how Suntory is combatting low beer sales in Japan. 

In our case study, we look closely at what made the US-based hard seltzer White Claw become a pop culture icon. 

Trend 3: The Shift to drinking smart. 
Low-cal, plant-based, and gluten-free options

Low-calorie or zero-carb drinks may cater to a different target audience than the no-to-low-alcohol beverage category.

These consumers are mindful of their caloric intake but may not be as concerned with the amount of alcohol they drink.

In response to the health-conscious consumer, a leading beer brand added transparency by adding a nutrition label on its pack. Also, explore a soy-based alcoholic brand, how it uses a nutritious by-product to create an innovative drink, and how Skinnygirl catapulted into a leading RTD brand. 

Trend 4: Unlocking Craft Alcohol.
The popularity of mall-batch wine, spirits, and beer

This trend toward premiumization is a hot trend we will see well into the future. 

In most industries, the major growth areas have been for premium products catering to niche consumer segments. The alcoholic beverage segment is no exception, and brands are catering to evolving tastes by improving their beverages through better craftsmanship and innovative flavours.

The growing demand for craft spirits is expected to be the primary trend in the future, even as we move into a downturn. 

Also, discover how countries like Thailand and India are growing their wines. And if you have heard about the hype behind George Clooney’s famous tequila brand, read the case study to learn about Clooney’s journey into small-batch premium alcohol. 

Trend 5: The future of packaging. 
Innovative, sustainable, and inclusive design 

The package material, shape, design, logo, colours, and messaging are all critical elements that help a brand tell its story.

So how do brands in the alcoholic beverage category balance it all? Download the case study to find out. 

While brands focus on creating sustainable production methods, they also need to rethink packaging and distribution, just like the innovative flat wine bottles that fit through a mail slot. Read the complete case study in the report. 

As people worldwide drink less, brands are working hard to quench their thirst and keep up with their changing tastes using market research insights and constant innovation.

To get an in-depth view of the emerging trends in the global alcoholic beverage industry, download the complete report today. 

Releasing new products is vital for companies and brands because it helps drive growth, create new revenue streams, and keep up with changing consumer demands. A product launch introduces a new product or service into the market. The term product launch is also known as product introduction or product rollout. The success of a product launch is determined by factors such as sales, customer feedback, and market share.

Teams inside an organisation that are typically responsible for launching new products include product management, engineering, design, marketing, and sales. Other groups, such as supply chain, logistics, and customer service, may also be involved depending on the product and industry.

Historical Timeline of Product Launches

The 1950s: The term “product launch” is first used. During this decade, major product launches include the introduction of the first commercial microwave oven by Tappan and the launch of the Polaroid camera by Edwin Land.

The 1960s: Major product launches during this decade include the launch of the Ford Mustang, the first miniskirt, and the introduction of the first home computer, the MITS Altair 8800.

The 1970s: This decade saw the launch of several iconic products, such as the Sony Walkman and the Atari 2600 video game console.

The 1980s: The 1980s were marked by the launch of several now-iconic products such as the IBM PC, the first Apple Macintosh computer, and the launch of the first mobile phone, the Motorola DynaTAC 8000X.

The 1990s: This decade saw the launch of several groundbreaking products, such as the first web browser, Mosaic, the first digital camera, the Kodak DCS 100, and the launch of the Sony Playstation, which revolutionised the gaming industry.

The 2000s: This decade was marked by the launch of several products that have had a significant impact on our lives today, such as the launch of the first-generation iPod by Apple, the first smartphone, the Blackberry 5810, and the launch of the social networking site Facebook.

The 2010s: In this decade, some of the most notable product launches include the launch of the first iPad by Apple, the launch of the first smartwatch, the Samsung Galaxy Gear, and the launch of the first self-driving car, the Tesla Model S.

The 2020s: This decade saw the launch of 5G networks, folding smartphones, and the Clubhouse app, which became popular in this era.

While this timeline is not exhaustive, it is also important to note that the term “product launch” is used not only for new physical products but also for services and digital products, as well as updates and upgrades to existing products.

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What factors cause a product to fail when launched?

There have been several notable product launches throughout history that have been considered disasters or failures.

One of the most widely cited examples of a failed product launch is the launch of the Segway in 2001. The Segway was marketed as a revolutionary new mode of transportation that would change how people move around cities. However, it failed to live up to the hype, and sales were much lower than expected. One of the reasons for its failure was its high cost, which made it unaffordable for most consumers. Additionally, many cities had laws that restricted the use of Segways on sidewalks, which limited their usefulness.

Another example of a failed product launch is Google Glass in 2013. Google Glass was a wearable device that had a small display in the corner of the user’s eye. The product was heavily criticized for its high price, lack of practicality, and privacy concerns surrounding the device’s camera.

Other failed product launches include the launch of the Amazon Fire Phone in 2014, which was unable to gain traction due to its high price and lack of unique features, and the launch of the Zune music player by Microsoft in 2006, which failed to compete with the dominant iPod.

While these products are considered failed launches, it doesn’t mean they were not successful on some level. For example, the Segway is still used in some niche applications, and Google Glass is used in some enterprise and industrial areas.

The percentage of new product launches that fail varies by sector. However, generally speaking, the majority of new product launches fail. According to some studies, the failure rate of new products can be as high as 90%.

In the technology sector, the failure rate for new products is estimated to be around 60-90%. This can be due to the rapid pace of technological change and the high level of competition in the sector.

In the consumer goods sector, the failure rate of new products is estimated to be around 30-40%. This can be due to the high level of competition and the need to adapt quickly to changing consumer preferences.

In the Pharmaceutical industry, the failure rate for new products is estimated to be around 80-90%. This can be due to the development process’s complexity, high research, and development costs, and strict regulatory requirements.

In the retail sector, the failure rate of new products is estimated to be around 30-40%. This can be due to the high level of competition and the need to adapt quickly to changing consumer preferences.

What have been some of the notable product launch successes?

A successful product launch is determined by its sales figures, impact on the market, and ability to change how people live. There have been several notable product launches throughout history that have been considered highly successful.

One of the most widely cited examples of a successful product launch is Apple’s launch of the iPhone in 2007. The iPhone was a revolutionary new product that combined the functionality of a smartphone with the ability to access the internet and run third-party apps. The launch of the iPhone was met with widespread acclaim and high demand, and it quickly became one of the best-selling devices of all time. The iPhone’s launch was a significant turning point in the industry and is considered to have set the standard for the modern smartphone.

Another example of a successful product launch is the launch of Coca-Cola in 1886. Coca-Cola was one of the first soft drinks, and it quickly became popular across the United States and eventually worldwide. Today, Coca-Cola is one of the world’s most recognised brands and is considered one of the most successful product launches in history.

Another example is the launch of the Post-it notes by 3M in 1980, revolutionizing how people organise their work and personal lives.

Do product launches look different for different industries?

Product launches can differ for different industries, such as FMCG (Fast Moving Consumer Goods) and technology.

For FMCG, the product launch process can focus more on distribution and logistics, as these products typically have a quick turnover and are widely available in retail stores. The process may also involve more traditional forms of advertising and promotional activities such as print, television, and outdoor advertising.

For technology, the product launch process may be more focused on product development and testing, as well as digital marketing and social media campaigns. These products may have a longer sales cycle and require more education and demonstrations to potential customers.

Also, for technology products, the product launch process may require more interactions with regulatory agencies, such as getting the product certified for compliance with industry standards.

Additionally, the nature of the products and target audience impacts how the launch will be conducted. For example, a B2B product launch may require more face-to-face interactions and product demonstrations, while a B2C launch may focus more on online campaigns and social media advertising.

Soft launch vs. full launch

A “soft launch” is a limited product or service release, usually to a select group of customers or in a specific region. A “full launch” is the official release of a product or service to the public. Other stages in product launching may include beta testing, pilot testing, and pre-launch marketing.

Whether a product launch is a soft launch or a full launch, a successful product launch is one that meets its objectives, such as reaching sales targets and gaining market share.

What should a brand consider before embarking on a new product launch?

An organisation should consider launching a new product when there is a need or opportunity in the market or when new technologies or advancements can be leveraged. Market research can help determine if there is a need or opportunity for a new product and what features and benefits customers are looking for.

Factors that should be considered before launching a new product include legal, financial, and intellectual property considerations. It is essential to ensure that the product does not infringe on any patents or trademarks and is financially viable.

When launching a new product, whether domestically or internationally, brands should consider several legal and intellectual property (IP) considerations to ensure compliance with local laws and regulations and to protect their IP rights. Launching a new product in international or foreign markets can have its own challenges, such as cultural and regulatory differences. It is important to conduct market research and to be aware of any legal and regulatory requirements in the target market.

Some of the key considerations include the following:

Patent protection: Brands should conduct a patent search to ensure that the product does not infringe on existing patents. Brands should also consider filing for patents to protect their own IP rights in each country they plan to launch the product.

Trademark protection: Brands should conduct a trademark search to ensure that the product name and branding do not infringe on any existing trademarks. Brands should also consider filing for trademarks to protect their own IP rights in each country they plan to launch the product.

Copyright protection: Brands should consider registering their copyrighted material, such as software, images, and text, to protect their IP rights in each country they plan to launch the product.

Compliance with local laws and regulations: Brands should research and comply with all relevant laws and regulations in the target market, such as product safety and labelling requirements, import/export regulations, and advertising laws.

Trade secrets protection: Brands should take steps to protect their trade secrets, such as confidential business information, by implementing non-disclosure agreements and other protective measures.

Customs protection: Brands should consider registering their IP rights with Customs in the target market to prevent counterfeit products from entering the country.

Licensing and distribution agreements: Brands should consider entering into licensing and distribution agreements with local partners to ensure compliance with local laws and regulations and to protect their IP rights.

What are the steps in launching a new product?

Important considerations when launching a new product include market research, product development, testing, and marketing. The steps include market research, product development, testing, and marketing. These steps can include the following:

Market research: Conduct market research to determine the size and characteristics of the target market, as well as identify the needs and wants of potential customers.

Product development: Developing the product based on the findings from market research, including design, engineering, and testing.

Pricing and positioning: Determining the price point and positioning of the product in the market.

Go-to-market strategy: Developing a strategy for launching the product, including marketing, sales, and distribution plans.

Pre-launch activities: Conducting pre-launch activities such as beta testing, pilot testing, and pre-launch marketing to generate buzz and interest in the product.

Launch: Officially launching the product to the market through various channels, such as press releases, product demonstrations, and advertising.

Post-launch evaluation: Monitoring the product’s performance and gathering customer feedback to make necessary improvements and adjustments.

These steps may vary depending on the product, the industry, and the target market. Also, the timing of each stage may vary, and some steps may be repeated or iterated as the product launch progresses.

How can market research help a brand launch new products successfully?

Market research can be used to gather information about target customers, competitors, and industry trends. Research methods can include surveys, interviews, focus groups, and online research. Several different types of market research can be used before, during, and after a product launch. Some of the most common types include:

Surveys: Surveys can be used to gather information about target customers, their needs and preferences, and to assess the potential market size for a new product. Surveys can be conducted online, by phone, or in person.

Focus groups: Focus groups are a way to gather information about target customers by bringing a small group of people together to discuss a specific topic or product. They can be used to gather information about customer needs, preferences, and feedback on a new product.

Interviews: Interviews can be used to gather in-depth information about target customers and their needs. They can be conducted in person or over the phone and can be used to gather information about customer needs, preferences, and feedback on a new product.

Online research: Online research is a way to gather information about target customers and the market through online resources such as social media, forums, and industry websites.

Ethnographic research: Ethnographic research is a way to gather information about target customers by observing and studying their behaviour in their natural environment.

A/B testing: A/B testing is a way to gather information about target customers by testing different versions of a product or marketing campaign with small groups of customers.

Sales data: Sales data can be used to gather information about customer needs and preferences after a product launch.

The type of market research that is most appropriate will depend on the product, the industry, and the target market. Additionally, it’s important to use multiple market research methods to understand the target market and customer needs.

Kadence International is an international market research agency with 30+ years of experience helping brands make game-changing strategic decisions. If you want to launch a product and understand how research can help, reach out! We would love to help.

Personas in marketing are fictional characters that represent a brand’s target customer. They are created based on market research and data and help a brand better understand its target audience to create more effective marketing strategies. 

The concept of marketing personas has its roots in the field of market research, dating back to the early 20th century. However, the use of personas, specifically in the context of marketing and product development, can be traced back to the 1990s.

In the book “Crossing the Chasm” by Geoffrey Moore, published in 1991, personas were used as a tool to help technology companies understand and reach early adopters of new products. In this context, personas were used to help identify the specific characteristics, needs, and pain points of early adopters, which helped companies to create targeted marketing campaigns and product development strategies.

Since then, the use of personas in marketing and product development has become increasingly popular. The concept has been adopted and adapted by companies across a wide range of industries. Today, personas are widely recognized as a valuable tool for understanding and reaching target audiences, and they are used by companies and brands of all sizes.

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A persona differs from a target market or audience because it is a specific, fleshed-out character rather than a broad demographic group. Creating personas is important because it allows a brand to tailor its messaging and marketing efforts to specific segments of its target audience rather than using a one-size-fits-all approach. The number of personas a brand should have depends on the size and complexity of its target audience. 

Brands should reevaluate their personas at least once a year and when there are significant changes in the target audience or market. Personas can change over time as a brand’s target audience evolves, so brands must reevaluate their personas regularly.

Brand personas can help marketing, sales, and service departments in an organization by:

Providing a clear understanding of the target audience: Personas can help teams to better understand who they are trying to reach and tailor their messaging and approach accordingly.

Improving communication: Personas can provide a common language and reference point for teams to use when discussing and planning marketing, sales, and service strategies.

Aligning efforts: Personas can help teams align their efforts and ensure that all activities work towards a common goal of reaching and serving the target audience.

There are no disadvantages to creating a persona; however, if a brand does not conduct proper research or creates personas that are not representative of its target audience, it can lead to ineffective marketing campaigns.

What companies and brands use personas?

Many companies and brands use personas as part of their marketing and customer service strategies. Personas are used across a wide range of industries, including:

Technology: Many technology companies, such as Apple, Microsoft, and Google, use personas to understand and target different segments of their customer base.

Retail: Retail companies, such as Amazon, Target, and Walmart, use personas to inform their product offerings and marketing efforts, for example, by using personas to understand the preferences of different types of shoppers.

Financial services: Banks and other financial institutions, such as Wells Fargo, Capital One, and JPMorgan Chase, use personas to understand and target different segments of their customer base, such as small business owners or retirees.

Healthcare: Healthcare companies, such as UnitedHealthcare, Aetna, and CVS Health, use personas to understand and target different segments of their customer base, such as seniors or families with young children.

Automotive: Automotive companies, such as Ford, Toyota, and BMW, use personas to understand and target different segments of their customer base, such as urban commuters or outdoor enthusiasts.

Professional Services: Professional services companies, such as consultancies, law firms, and PR agencies, use personas to understand and target different segments of their customer base, such as small business owners or executives.

Entertainment and Media: Entertainment and Media companies, such as Disney, Netflix, and NBC Universal, use personas to understand and target different segments of their customer base, such as families, young adults, and older adults.

These are just a few examples, and personas are also used in many other industries. Personas are a valuable tool for any company or brand looking to better understand and reach its target audience. 

What are some examples of personas?

Here are a few examples of personas:

“Samantha” – A 35-year-old working mother with two children. She has a bachelor’s degree and works as a marketing manager. She is tech-savvy, always on the go, and values convenience and efficiency. She is interested in products and services that make her life easier, such as meal delivery services or online grocery shopping.

“Jack” – A 25-year-old recent college graduate. He is ambitious, outgoing, and socially conscious. He is an avid runner interested in products and services that align with his healthy lifestyle, such as fitness trackers and running shoes. He is also interested in sustainable products and socially responsible companies.

“Maria” – A 55-year-old retiree. She is a grandmother, former school teacher, and community volunteer. She is financially stable and enjoys travelling and trying new things. She is interested in products and services that cater to her interests, such as travel insurance, cruises, and educational tours.

“Ahmed” – A 42-year-old software engineer. He is a father of two and has a graduate degree in computer science. He is tech-savvy and enjoys learning about the latest technology developments. He is interested in products and services that can help him in his work and personal life, such as productivity tools, online courses, and home automation devices.

“Lena” – A 22-year-old college student. She is a fashion enthusiast and enjoys listening to music and hanging out with her friends. She is interested in products and services that align with her interests, such as clothing, accessories, and music streaming services.

These are just examples; remember that personas are fictional representations of ideal customers. It’s important to tailor the personas based on the specific characteristics of your target audience and the product or service you are offering.

What are the alternatives to using personas?

There are several alternatives to using personas as a way to understand and target customers, including:

Segmentation: Segmenting customers based on demographics, behaviour, and psychographics can be an effective way to understand and target different segments of the customer base.

Customer journey mapping: Creating detailed maps of the customer journey stages can help identify key pain points and opportunities for engagement.

Surveys and feedback: Gathering customer feedback through surveys and other methods can provide valuable insights into customer needs and preferences.

Analytics and data: Using data and analytics, such as website visitor data and customer purchase data, can help to identify patterns and trends that inform marketing strategies.

Buyer personas: Creating buyer personas similar to marketing personas, except they focus more on the customer’s decision-making process and the buying journey they go through.

Customer profiling: Creating detailed profiles of customers that include information such as demographics, behaviour, and psychographics can be a useful way to understand and target different segments of the customer base.

These alternatives can be used in conjunction with personas or as a replacement for them, depending on the specific needs of the company or brand. Choosing the approach that best aligns with the company’s goals and resources is important when deciding to use or not use personas.

How can brands track the effectiveness of using personas?

Several marketing technology platforms incorporate personas as part of their features, making it easy to track personas. These include:

Marketing Automation Platforms: Many marketing automation platforms, such as Marketo, Pardot, and Hubspot, allow users to create and segment personas within their platform and then use them to inform targeted campaigns, lead scoring, and other marketing activities.

CRM Systems: Some CRM systems, such as Salesforce, allow users to create and segment personas within the system and then use them to inform targeted sales and marketing campaigns and to better understand and track customer interactions.

Content Management Systems: Some content management systems, such as WordPress, Sitecore, and Adobe Experience Manager, allow users to create and segment personas within the system and then use them to inform targeted content and website experiences.

A/B Testing and Personalization Platforms: Some A/B testing and personalization platforms, such as Optimizely, Adobe Target, and VWO, allow users to create and segment personas within their platform and then use them to inform targeted A/B tests and personalization campaigns

Social Media Management Platforms: Some social media management platforms such as Hootsuite, Sprout Social, and Agorapulse allow users to create and segment personas within the system and then use them to inform targeted social media campaigns and to better understand and track social media interactions.

These are just a few examples, and many other marketing technology platforms incorporate personas in different ways. It’s essential to do thorough research and choose the one that fits your organization’s needs.

What are the stages or steps in developing marketing personas?

The stages of developing a persona for a brand typically include conducting market research, analyzing data, and creating a detailed character profile. Specifically, these stages include:

Research: Gather information about your target audience through surveys, focus groups, and other methods.

Analysis: Organize and analyze your collected data to identify patterns and common characteristics.

Creation: Use the information from your research and analysis to create a detailed, fictional representation of your ideal customer.

Elements that are essential to include in creating a brand persona include:

Demographics: Age, gender, income, education, occupation, etc.

Psychographics: Personality, values, interests, lifestyle, etc.

Goals and challenges: What the customer wants to achieve and what obstacles they face.

What should be considered when rolling out personas in an organization?

The best way to roll out personas in an organization can vary depending on the size and structure of the organization, but some general best practices include the following:

Conduct thorough research: Gather data from a diverse range of sources, such as surveys, customer feedback, and analytics, to ensure that your personas are representative of your target audience. During the research phase, gather data from a diverse range of people to ensure that your personas represent the diverse segments of your target audience.

Get buy-in from key stakeholders: Before rolling out personas, ensure you have the support and buy-in from key stakeholders, including leadership, marketing, sales, and customer service teams.

Be detailed, specific, and realistic: Create clear and specific personas that include information such as demographics, psychographics, goals, and challenges. The more detailed and specific the persona, the more valuable it will be. Personas should be realistic and reflect the fundamental characteristics of your target audience, avoid creating idealized versions of your customers that don’t exist in the real world.

Avoid stereotypes: When creating personas, be mindful of stereotypes and avoid making assumptions based on demographics or other characteristics. Instead, focus on each persona’s unique characteristics, goals, and challenges.

Keep personas up-to-date: Personas should be regularly reviewed and updated to ensure they remain accurate and relevant. This can be done by conducting research, gathering feedback, and analyzing data regularly.

Make personas easily accessible: Make personas easily accessible to all teams by creating a central repository for them or including them in relevant documents, such as customer service scripts or marketing plans.

Provide training and resources: Provide training and resources to help teams understand how to use personas in their work and incorporate them into their strategies and tactics.

Use personas in decision-making: Encourage teams to use personas as a reference point when making decisions and evaluating the effectiveness of their strategies and tactics.

Communicate and share personas: Make sure that personas are easily accessible to all teams and are used as a common language and reference point for discussing and planning marketing, sales, and service strategies. Clearly communicate the value of personas and how they can help the organization reach and serve its target audience more effectively.

Involve diverse team members: Involve team members from diverse backgrounds in the persona development process to ensure that different perspectives are considered and incorporated into the personas. 

Be inclusive: Consider how your personas might be perceived by different groups of people and make sure that they are inclusive and do not exclude or marginalize any particular group. Use inclusive language when describing personas, and avoid using offensive or exclusionary language.

Celebrate successes and use cases: Share successes and use cases of how personas have helped the organization to better reach and serve the target audience. This will help to build the trust and interest of the teams and stakeholders.

By following these best practices, companies and brands can create and use personas representative of their target audience, which can help improve marketing campaigns and lead scoring and better understand and reach the target audience.

Market research agencies like Kadence International can help with brand personas by providing valuable data and insights into the target audience’s demographics, needs, and behaviours. If you want to learn more about how Kadence can help you with your brand’s strategies and goals, we are more than happy to help.

Focus groups are a qualitative market research method where a small, diverse group of participants is brought together to discuss a specific topic or product. Focus groups gather qualitative data and gain insights into consumer attitudes, opinions, and behaviours.

Focus groups, also known as ‘group interviews’ or ‘group discussions,’ are used in various fields, including market research, sociology, psychology, and political science.

Brands benefit from focus groups by gaining deeper insights into their target market, particularly consumer attitudes and behaviours.

Key advantages of focus group research include gaining in-depth insights into consumer attitudes and behaviours, as well as observing nonverbal communication and group dynamics. For this reason, focus groups are often better than market research surveys when the research goals require in-depth insights into consumer attitudes and behaviours.

The disadvantages of focus groups include the potential for bias and the small sample size.

“Focus groups are projected to represent 18% of the global qualitative research market by 2025, highlighting their ongoing importance in understanding consumer behavior.”

Source: Statista Market Research Forecast.

The origins of focus groups in research

Focus groups originated in the 1940s, when they were first used to gather information about consumer attitudes toward new products. Over the years, focus groups have expanded to cover various research topics, including advertising, media research, public policy, and healthcare.

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The idea behind focus groups was developed by Paul Lazarsfeld, a director of the Bureau of Applied Social Research, along with his colleague and sociologist Robert K. Merton. Merton is considered the “father of focus groups.” The term “Focus group” was coined by Merton to describe the group as a whole but also to emphasize the central theme or topic the group is discussing. 

The first focus group is believed to have been conducted to test reactions to anti-Nazi radio broadcasts on behalf of the Office of War. At the time, the US public was not eager to go to war, so a focus group was used where participants listened to radio broadcasts and pressed buttons that indicated their “like” or “dislike.”

The mechanics of running focus groups

When choosing focus groups as part of your market research, it is essential to consider the target market, the research goals, and the resources available. 

It is essential to have well-designed discussion guides to ensure a focus group session is worthwhile and a trained moderator can keep the discussion on track and gather valuable data.

A discussion guide is a set of questions or prompts that a moderator uses during a focus group to guide the discussion and explore the research question. The discussion guide ensures that the focus group stays on topic and covers all relevant areas of interest. It’s a roadmap for the focus group that keeps the discussion organized and structured.

Also, read “The importance and types of Research Design” here.

A discussion guide typically includes the following:

  • Introduction: A brief overview of the purpose of the focus group and the research question
  • Objectives: A list of specific objectives or goals for the focus group discussion
  • Open-ended Questions: A set of open-ended questions that encourage participants to share their thoughts and opinions. These are the main questions that the moderator will ask during the focus group.
  • Probes: Additional questions or prompts that the moderator can use to explore a topic in more depth or to clarify a participant’s response.
  • Group activities: Activities or exercises that the moderator can use to encourage participation and generate new ideas.
  • Closing Discussion: A set of questions or prompts that the moderator can use to summarize the main points discussed during the focus group and to encourage participants to share any final thoughts or comments.

A typical focus group includes 6 to 10 participants and takes place in a moderated discussion led by a trained facilitator. The participants are selected to be representative of the target market for the product or service being studied. A typical focus group session lasts between 1 and 2 hours, and participants are usually compensated for their time with cash or a gift card.

Brands ensure confidentiality in a focus group session by signing non-disclosure agreements with the participants and keeping the discussion private.

When conducting focus groups, it is generally recommended to group participants by demographics such as age, income, education, gender, and other relevant characteristics important to the research. This is because different demographic groups may have different attitudes, beliefs, and behaviours related to the topic. By grouping participants by demographics, researchers can gain a more detailed understanding of how different segments of the population feel about a particular product or service.

However, in some cases, it may be more appropriate to group participants by other criteria, such as their level of experience with the product or service being studied. Additionally, if the research is focused on a specific demographic group, it may not be necessary to group participants by other demographic characteristics.

Ultimately, deciding how to group participants should be based on the specific research question and the study’s goals. The researcher should consider what demographic information is essential to the research and what will yield the most meaningful results.

Focus groups typically take place in a focus group facility or a rented room. A professional focus group facility is designed to provide a comfortable and welcoming environment for participants while also being equipped with the necessary technology and equipment to conduct the focus group. 

Some characteristics of a professional focus group facility include:

  • Privacy: The facility should provide a high level of privacy for participants, with soundproofing and other measures to ensure that outsiders cannot overhear the discussion.
  • Comfort: The facility should be comfortable for participants, with comfortable seating and appropriate lighting.
  • Technology: The facility should have the necessary technology to conduct the focus group, such as audio and video recording equipment and a computer and projector for presentations.
  • Observation Room: The facility will often include an observation room, where researchers and clients can observe the focus group discussion through one-way mirrors or live streaming.
  • Breakout Rooms: In some cases, the facility may have breakout rooms or small rooms for individual interviews or small group discussions.
  • Control Room: The facility will have a control room or an area where the researchers can manage and monitor the audio and video recording equipment and where the data can be analyzed.
  • Reception Area: A professional focus group facility should have a reception area where participants can sign in, receive instructions and wait for the focus group to start.
  • Catering: In some cases, the facility may provide refreshments and food, which can help to create a more relaxed and comfortable environment for participants.

A typical focus group agenda can include the following:

  1. Introduction: The moderator introduces themselves and the purpose of the focus group. Participants are welcomed and given an overview of the agenda for the session.
  2. Icebreaker: The moderator may start with an icebreaker to help participants relax and get to know each other. This can be a simple activity or game that helps to break the ice and create a comfortable and welcoming environment.
  3. Background information: The moderator may ask participants to provide background information such as their occupation, age, and other relevant demographic information.
  4. Discussion topics: The moderator will then introduce the main discussion topics, which will be based on the research question and objectives. The moderator will ask open-ended questions to encourage participants to share their thoughts and opinions.
  5. Group activities: The moderator may also use group activities, such as brainstorming, to encourage participation and generate new ideas.
  6. Break: Depending on the length of the focus group, the moderator may take a break to allow participants to rest and refresh.
  7. Closing discussion: The moderator will summarize the main points discussed during the focus group and ask participants if they have any final thoughts or comments.
  8. Conclusion: The moderator will thank the participants for their time and provide them with any necessary information regarding compensation or follow-up.

The agenda should be tailored to the focus group’s research question, objectives, and duration. It can also include other activities, such as product testing or a mock-up of a campaign or product presentation.

Some typical questions that get asked in a focus group session include: “What are your thoughts on this product/service?”, “What are the main reasons you would or wouldn’t buy this product/service?” and “How does this product/service compare to similar products/services on the market?”.

Focus groups continue to be one of the most popular qualitative research methods, with over 75% of market research professionals stating they have used them in the last year.”

Source: GreenBook Research Industry Trends (GRIT) Report.

The role of a focus group moderator

The moderator is vital in ensuring the focus group session is well-managed. The moderator’s responsibilities include:

  • Keeping the discussion on the topic.
  • Encouraging participation from all group members.
  • Ensuring the discussion stays respectful.

Education, skills, and experience required for a focus group moderator can vary depending on the type of research conducted and the specific industry. A bachelor’s degree in a related field, such as marketing, sociology, or psychology, is often preferred. Relevant experience in market research or a related field is also beneficial. Additionally, a moderator should understand research methodology and data analysis well.

Above all, a focus group moderator needs strong communication and interpersonal skills and the ability to lead a group discussion and keep the conversation on the topic. 

It is advised to use an experienced focus group moderator. Brands can find focus group moderators by searching for market research firms, like Kadence International, that specialises in focus groups or by searching for independent moderators on professional networking websites.

What are the benefits of focus group research?

Focus groups have several positives when used as a method of market research. Some of the main advantages include:

  • Rich, detailed data: Focus groups provide qualitative data that can be rich and detailed, allowing researchers to gain a deep understanding of consumer attitudes, beliefs, and behaviours.
  • Group dynamics: The group setting of focus groups allows participants to discuss and share their thoughts and opinions, which can lead to new insights and perspectives that might not be apparent from individual interviews.
  • Flexibility: Focus groups can be used to explore a wide range of topics, from product development to advertising and marketing strategies. They can also be modified to fit the specific needs of a research project.
  • Cost-effective: While conducting focus groups can be relatively expensive, it is considered cost-effective compared to other qualitative research methods, such as in-depth interviews.
  • Interaction: Focus groups provide a way for participants to interact with each other, making the experience more engaging and interesting. It can also help the researcher understand how participants interact with each other and the topic.
  • Observation: The researcher can observe participants’ nonverbal cues and body language, which can be useful in interpreting their responses.
  • Realistic: Focus groups can be used to simulate real-life situations, such as testing a new product in a home-like setting, which can provide valuable insights into how consumers would use the product in the real world.

What are the drawbacks of focus groups?

There are some potential negatives to conducting focus groups. Some of the main drawbacks include:

  • Group dynamics: Focus groups rely on group dynamics to generate discussion and insights. However, group dynamics can also lead to social loafing, where some participants may contribute less to the discussion or may be influenced by the opinions of others.
  • Selection bias: The participants in a focus group are self-selected and may not represent the population being studied. This can lead to biased or misleading results.
  • Cost: Conducting focus groups can be relatively expensive due to the costs of recruiting participants, renting a facility, and compensating participants for their time.
  • Time-consuming: Focus groups can be time-consuming to conduct, especially if multiple groups are needed to achieve a representative sample.
  • Limited scope: Focus groups provide qualitative data, which can be rich and detailed, but it’s a small sample size of participants. It may not be representative of the entire population.
  • Influence of the Moderator: The Moderator has a big influence on the group dynamics, and their tone, attitude, and questions can lead the group to provide certain answers.

To mitigate these potential negatives, it’s crucial to conduct focus groups as part of a more extensive research study and to carefully consider the recruitment, moderation, and data analysis methods to ensure the results are reliable and valid.

Despite the rise of online surveys, focus groups remain a go-to for 68% of researchers when in-depth consumer insights are needed.”

Source: ESOMAR Global Market Research Report.

What can go wrong in a focus group?

During a focus group, several things can go wrong that can affect the quality of the data collected and the overall success of the focus group. Some examples of what can go wrong include:

  • Lack of participation: Some participants may be unwilling or unable to participate in the discussion, leading to a lack of data or an unbalanced group dynamic.
  • Dominant participants: Some participants may dominate the discussion, preventing other participants from expressing their opinions or leading the discussion in a direction that is irrelevant to the research question.
  • Lack of focus: The discussion may stray off-topic or become bogged down in irrelevant details, making it difficult to gather meaningful data.
  • Technical issues: The recording equipment may malfunction, or the facility may not be suitable for the focus group, which can affect the data quality.
  • Boredom: Participants may become disengaged or bored if the discussion is too long or not engaging enough, which can also affect the quality of the data collected.
  • Ethical concerns: Participants may feel uncomfortable sharing certain information or may not be aware of their rights as research participants, which can affect the data quality.
  • Moderator bias: The moderator may be biased towards certain participants or opinions, leading to an unbalanced discussion and invalid data.

“Group thinking” refers to a phenomenon in which focus group members conform to the opinions of the majority rather than expressing their own opinions. To avoid group thinking in focus groups, several strategies can be employed:

  • Encourage dissenting opinions: The moderator should actively encourage participants to express dissenting opinions and not allow one or two participants to dominate the discussion.
  • Use open-ended questions: Open-ended questions allow participants to express their thoughts and opinions freely rather than leading them to a specific answer.
  • Use a neutral moderator: The moderator should be neutral and not show bias towards any particular participant or opinion.
  • Use a variety of participants: A diverse group with different backgrounds, experiences, and opinions can help avoid group thinking.
  • Break the Group: When the discussion is too focused on a specific topic, the moderator can break the group into smaller groups and give different tasks to each one. This way, the group dynamics will change, and new perspectives will be brought to the discussion.

It’s important to note that the goal is not to eliminate group thinking entirely but to minimize its impact on the discussion and the data collected during the focus group. By combining these strategies, focus group moderators can increase the likelihood of getting a more diverse set of opinions and avoid a single perspective dominating the discussion.

Comparison of Focus Groups vs. Other Research Methods

Research MethodKey CharacteristicsBest Used ForProsCons
Focus GroupsSmall group of participants discussing a topic in a moderated setting.Gaining in-depth qualitative insights, exploring new concepts, understanding consumer behaviors and attitudes.Rich qualitative data, non-verbal communication insights, group dynamics, real-time discussion.Potential for groupthink, smaller sample size, more expensive than surveys.
SurveysStructured questionnaires filled out by individual participants.Collecting quantitative data from a larger sample size.Cost-effective, large sample size, quick data collection.Lack of in-depth insights, no group dynamics, limited ability to explore complex topics.
In-depth InterviewsOne-on-one conversations with participants to gather detailed qualitative insights.Exploring individual behaviors, motivations, and attitudes deeply.Detailed, rich data, no influence from group dynamics.Time-consuming, more expensive, limited to individual perspectives.
Ethnographic ResearchObserving participants in their natural environment to understand behaviors and interactions in real-world contexts.Understanding behaviors in natural settings, product usability, consumer habits.Authentic insights, understanding real-world usage.Time-consuming, requires high investment, difficult to scale.
Online CommunitiesA virtual group of participants who engage in discussions over time, usually in an online forum or community setting.Building deeper engagement with a community over time, exploring evolving consumer attitudes and behaviors.Flexible, participants can engage over time, good for long-term studies.Participants may drop off, online setting limits non-verbal cues and immediate feedback.

Which is better – focus groups or surveys?

On the other hand, a qualitative survey can be conducted online or by phone, allowing a larger sample size in a shorter period of time. The survey may be less expensive than focus groups and can be conducted with a diverse group of participants.

In terms of which is better, it depends on the specific research question and the study’s goals. Both focus groups and qualitative surveys have their strengths and weaknesses, and the best method to use will depend on the research question, budget, and resources available.

Focus groups are more suitable for in-depth exploration of a specific topic and to gain an understanding of the group dynamics and nonverbal cues. 

Qualitative surveys are more appropriate for a broader research question and to reach a larger sample size in a shorter period.

Both methods can be complementary and can be used together in a mixed-methods approach to gain a more comprehensive understanding of a research question.

Market research companies can help brands with focus groups by providing recruitment services, moderating the discussion, and analyzing the data. If you would like to know if focus groups will help answer your research question, please submit a research brief, and one of our offices will be in touch.

Social listening in market research refers to the process of monitoring and analyzing conversations and mentions of a brand or product on social media platforms. It allows companies to understand consumer sentiment, identify trends and opportunities, and track the performance of their marketing campaigns. 

Social listening is also known as social media monitoring or online reputation management. The responsibility for social listening typically falls under the purview of the marketing or customer service department within an organisation. 

Many types of brands use social listening, including consumer goods, retail, technology, and healthcare. 

The history of social listening can be traced back to the early days of social media, with the term’s first use dating back to the mid-2000s. 

Why should brands care what people are saying about them online?

Brands should care about their online reputations because what is said about them online can significantly impact their business. 

A positive online reputation can lead to increased brand awareness and customer loyalty, ultimately driving sales. On the other hand, a negative online reputation can lead to a loss of customers and harm the brand image and the bottom line.

Social listening can be a powerful tool for protecting and managing a brand’s online reputation. By monitoring what is being said about the brand on social media and other online platforms, brands can identify potential issues early on and take steps to address them before they escalate.

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One example of how brand damage could have been avoided through better social listening is the case of United Airlines. In 2017, a video of a passenger being forcibly removed from one of United’s flights went viral on social media. The incident caused a significant backlash against the airline, and the company’s stock price dropped as a result. Had United been monitoring social media more closely, they could have identified the issue and responded more quickly, potentially mitigating some of the damage to the company’s reputation.

Another example is Nestle. In 2010, Nestle was hit by a consumer boycott and negative media coverage after Greenpeace accused the company of using palm oil linked to the destruction of rainforests. Nestle’s social listening process was not robust enough to detect the issue, it took Nestle almost two weeks to respond to the crisis, which already had a considerable impact on the brand’s reputation. Had Nestle been more proactive in monitoring social media, it could have quickly identified the issue and taken steps to mitigate the damage.

What steps should be followed in social listening, and what information can be uncovered?

The steps in social listening typically include the following:

  1. Setting clear goals and objectives for the research
  2. Identifying the social media platforms and channels to be monitored
  3. Collecting and analyzing data from these platforms and channels
  4. Interpreting the data and identifying patterns and trends
  5. Taking appropriate action based on the insights gained

Social listening can uncover a wide range of information, including:

  1. Brand mentions: Social listening can help brands identify how often their brand is mentioned online and where it occurs. Brands can listen for various mentions, including their brand name, product names, or key phrases associated with their brand. This can help them understand how their brand is being talked about online and identify potential issues or opportunities.
  2. Consumer sentiment: Social listening can help brands understand consumer opinions and perceptions of their brand by identifying patterns and trends in consumer sentiment, positive, negative, or neutral. This can help them understand consumer opinions and perceptions of their brand.
  3. Competitor mentions: Brands also listen for mentions of their competitors’ names, products, and key phrases. This can help them understand the strategies and tactics that are working well for their competitors and identify areas where they can improve.
  4. Industry trends: Social listening can help brands understand the conversations and trends within their industry and identify potential opportunities. This can help them understand trends and discussions in the industry and identify potential opportunities.
  5. Campaign and promotion performance: Social listening can help brands understand how well their campaigns and promotions resonate with consumers and identify areas where they can improve.
  6. Reputation management: Social listening can help brands identify potential crisis situations and take appropriate action to address them. Brands can listen for any negative comments or complaints about their brand. This can help them identify potential crisis situations and take appropriate action to address them.
  7. Influencer and brand advocate: Social listening can help brands identify potential brand ambassadors and understand how key groups of consumers perceive their brand. This can help them identify potential brand ambassadors and understand how key groups of consumers perceive their brand.
  8. Customer feedback and complaints: Social listening can also identify customer feedback and complaints, providing valuable insights into what customers like and dislike about a brand’s products or services.
  9. Demographics: Social listening can also help brands understand who is talking about their brand, as well as their age, location, gender, and interests.
  10. Product feedback: Social listening can also give brands feedback on their products, what customers like and dislike about them, and suggestions for improvement.

What tools are available for social listening?

There are a variety of technology tools available for social listening. These include:

  1. Social media monitoring tools: These tools allow brands to track mentions of their brand and specific keywords across social media platforms. Some popular examples include Hootsuite, Sprout Social, and Buzzsumo.
  2. Sentiment analysis tools: These tools use natural language processing and machine learning algorithms to automatically classify and categorize mentions of a brand as positive, negative, or neutral. Examples include Brand24, Digimind, and Synthesio.
  3. Listening platforms: These platforms offer a comprehensive social listening solution that covers many data sources, including social media, news, and blogs. Examples include Mention, Brandwatch, and NetBase Quid.
  4. AI-based tools: These are the latest tools that use Artificial Intelligence to provide more in-depth insights, such as sentiment, emotion, and intent. Examples include Cognovi Labs, Receptiviti, and Persado.
  5. Data visualisation tools: These tools help to make sense of the large amounts of data collected by social listening tools by presenting it in a clear and easily understandable format. Examples include Tableau, QlikView, and Looker.

These tools vary in terms of features, capabilities, and pricing, and brands must choose the right one that fits their specific needs and budget. Additionally, some more advanced tools offer features such as real-time monitoring, alerts and notifications, and integration with other business systems.

Should brands use social listening on their competitors?

Brands can use social listening to monitor their competitors. By monitoring their competitors’ social media channels, they can gain insights into the strategies and tactics that work well for their competitors and identify areas where they can improve. They can also track their competitors’ product launches, promotions, and advertising campaigns and monitor for any potential crisis situations. This can help brands stay competitive and make informed decisions about their own products and marketing strategies. 

Additionally, by monitoring competitors’ social media profiles, brands can monitor their competitors’ key performance indicators and see how their performance compares to theirs.

What happens if a brand hears something negative through social listening?

If a brand hears something negative based on social listening research, it should investigate the claims to verify their accuracy. If the negative sentiment is valid, the brand should take appropriate action to address the issue. This could include issuing a public apology or statement, addressing the specific concerns raised or making changes to the product or service. They should also take steps to prevent similar issues from arising in the future.

What are the negatives of social listening?

There are several challenges that brands may face when conducting social listening, including:

  1. Data overload: With so much data available, it can be challenging to sift through and make sense of it all. This can make it difficult to identify meaningful insights and trends.
  2. Manual data interpretation: Many social listening tools require manual data interpretation, which can be time-consuming and prone to errors.
  3. Bias in data collection: Social listening tools rely on keywords and phrases to collect data, which can lead to bias in the data if not chosen carefully.
  4. Privacy concerns: Social listening can raise privacy concerns by collecting and analyzing personal information. It’s essential to comply with data privacy regulations and have a clear privacy policy.
  5. Lack of context: Social listening tools can provide a lot of data, but they may lack context. For example, a negative comment about a brand may not necessarily mean a negative sentiment towards the brand but a personal experience.
  6. Limited reach: Some social listening tools have limited reach and may only be able to capture some of the conversations about a brand or topic.
  7. Integration with other systems: Integrating social listening data with other business systems, such as CRM and marketing automation, can be challenging and require additional investment.

To overcome these challenges, brands should set clear goals and objectives, choose the right tools and platforms, and take appropriate action based on the insights gained. 

Additionally, brands should consider partnering with a professional market research agency with experience in social listening, like Kadence International, to help ensure their social listening efforts are successful. If you want Kadence International to help you understand your online reputation through social listening, please reach out, as we are more than happy to help.

Usage and attitudes studies are a type of market research focusing on understanding how consumers use a product or service and their attitudes and perceptions towards it. Usage and attitudes studies are commonly known by the acronym U&A and are sometimes called “usage and satisfaction studies” and “usage and performance studies.” 

Typically, teams within a company responsible for conducting usage and attitude studies are market research teams, product development teams, and marketing teams. These teams are responsible for gathering data, analyzing results, and making recommendations to the company based on their findings.

The research gathered from a usage and attitude study is used to make informed decisions about product development, marketing, and sales strategies. A brand may also conduct a usage and attitude study when launching a new product or service or considering making changes to an existing one. Additionally, a brand may conduct a usage and attitude study periodically to monitor changes in usage and perception over time. 

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A U&A study typically involves a combination of quantitative and qualitative research methods. The quantitative methods usually include multiple choice and closed-ended survey questions that are used to gather data on usage patterns and attitudes. Qualitative methods, such as focus groups and in-depth interviews, can provide insight into why users have certain attitudes and behaviours. U&A studies can be conducted on a specific target audience, such as current product users, or a broader population, such as all consumers in a particular market.

Various industries can use U&A studies to benefit their brands, including consumer goods, healthcare, technology, and services. They are often used in the early stages of product development to gather feedback on prototypes or concepts and in later stages to monitor ongoing performance and identify areas for improvement.

What is the history of U&A studies?

The history of usage and attitudes studies can be traced back to the early 20th century, with the first known study conducted by George Gallup in the 1930s during the early days of radio and television. Advertisers and broadcasters needed to understand how audiences used these new mediums and what they thought of the programming and advertisements. 

The first U&A studies were relatively simple, typically involving a small sample of listeners or viewers who were asked to fill out a survey or participate in a focus group. 

These early studies primarily focused on gathering information on listening or viewing habits, such as how often a program was listened to or watched and what types of programs were preferred. They also gathered information on demographics, such as age, gender, and occupation.

How do U&A studies help brands?

A well-conducted usage and attitudes study can help a brand in many ways. For example, it can provide valuable insights into consumer needs and preferences, allowing a company to better target its marketing efforts and develop products that meet those needs. It can also help identify potential issues with a product or service, allowing a company to address them before they become major problems.

Brands that use usage and attitudes studies want to gather information about how their products or services are being used and perceived by consumers. This information garnered from the research can then be used to make strategic decisions.

When should a brand NOT conduct a U&A study?

There are some potential reasons why a brand may choose to refrain from conducting a usage and attitude study.

  1. Cost: Usage and attitude studies can be expensive to conduct and may not be feasible for some brands with limited budgets.
  2. Lack of relevance: A brand needs to be more interested in understanding how its product or service is used and perceived. If not, there may be no solid reason for conducting a usage and attitude study.
  3. Limited sample size: If a brand has a small target audience, it may be difficult to obtain a representative sample for the study, which can limit the usefulness of the results.
  4. Limited resources: Conducting a usage and attitude study requires significant time and resources, and a brand may need more capacity to devote to the project.
  5. No changes planned: if a brand is happy with how its product or service is currently being used and perceived, it may not see the need to conduct a usage and attitude study.

A brand may also decide to conduct a different kind of research to give them the necessary information. Several types of research can be used instead of a usage and attitude study. Some examples include:

  1. Market understanding: This type of research focuses on understanding the market for a product or service, including information on the target audience, competitors, and overall market trends.
  2. User research: This type of research focuses on understanding how users interact with a product or service and can include user interviews, usability testing, and focus groups.
  3. Surveys: Surveys can be used to gather a wide range of information from a large number of people. Surveys can include closed-ended questions and open-ended questions.
  4. A/B testing: A/B testing allows brands to compare two versions of a product or service to see which one performs better.
  5. Analytics: Brands can use analytics tools to track user behaviour, such as how often a product is used, how long users spend using it, and which features are most popular.
  6. Social Listening: This research focuses on tracking and analyzing what people say about a brand’s product or service on social media platforms, blogs, forums, and review sites.

Depending on the research question, a combination of different research methods may be used to get a comprehensive understanding of a brand’s product or service.

What does a U&A study typically look like?

A U&A study aims to collect information on the usage habits, attitudes, perceptions, and overall satisfaction of the target audience with a product or service. This type of research can provide valuable insights for a brand, such as identifying areas of improvement, developing new marketing strategies, and measuring the effectiveness of existing campaigns.

When conducting a usage and attitudes study, it is vital to have a clear research plan, recruit a representative sample of participants, and use appropriate research methods for collecting and analyzing data. It is also essential to be transparent about any limitations or potential sources of bias in the study.

The stages of conducting a usage and attitudes study typically include:

  1. Defining the research objectives and developing a research plan
  2. Identifying and recruiting participants
  3. Collecting data through surveys, focus groups, or interviews
  4. Analyzing the data and interpreting the results
  5. Communicating the findings and making recommendations for action

A typical usage and attitudes study will involve a sample of participants, usually between 100 and 500, depending on the size of the target market. The study can include a combination of quantitative and qualitative research methods, such as surveys, focus groups, and interviews.

The length of a usage and attitudes study can vary depending on the research objectives, the size of the sample, and the research methods used. A typical study may take several weeks or months to complete.

Questions typically asked in a usage and attitudes study include:

  • How often do you use the product/service?
  • How satisfied are you with the product/service?
  • What are the main benefits of the product/service?

What outcomes can a brand expect from a U&A study?

A brand can hope to gather several key insights from a usage and attitude study:

  1. Usage patterns: Information on how often, where, and why a product or service is being used, as well as the demographic characteristics of users.
  2. Attitudes and perceptions: Information on how users feel about a product or service, including their level of satisfaction, loyalty, and likelihood to recommend it to others.
  3. Brand awareness and perception: Information on how aware users are of the brand and what associations they have with it. (Also read “The essential guide to brand awareness research” here.)
  4. Purchase behaviour: Information on where and how users purchase a product or service and the factors that influence their purchasing decisions.
  5. Competitive landscape: Information on how users perceive a brand’s products or services in comparison to those of competitors.
  6. Areas for improvement: Identifying areas where the product or service can be improved to better meet the needs and wants of users.
  7. Marketing effectiveness: Information on how well existing marketing campaigns and advertising efforts resonate with the target audience and how they can be improved.

Overall, a usage and attitude study can provide a brand with valuable insights on how to improve its product or service and how to better target its marketing efforts to reach its target audience.

Should I outsource my brand’s U&A study?

The advantages of conducting a usage and attitudes study in-house include:

  1. Direct access to company data and knowledge
  2. Greater control over the research process and ability to tailor the study to specific company needs
  3. Cost savings as no external agency is needed.

The disadvantages of conducting a usage and attitudes study in-house include:

  1. Limited resources and expertise in research methodology
  2. Lack of objectivity and potential for bias
  3. Limited sample size, which can affect the representativeness of the results

Outsourcing your brand’s U&A study to an external market research agency like Kadence International can bring in experts in research methodology and additional resources to help ensure a more accurate and representative study. We can help you determine if a U&A study is appropriate, fine-tune your research questions, and discover game-changing strategies for your brand.

Brand awareness is the level of familiarity and recognition a consumer has with a particular brand or product. It is typically measured by asking consumers if they are familiar with a brand and if they can recognise it when presented with it. Brand awareness is also known as brand recognition or brand recall. The responsibility for brand awareness within an organization typically falls to the marketing and advertising departments.

There is no maximum amount of brand awareness that a brand can expect, as it can vary greatly depending on the industry and competition. A well-known brand has a high level of brand awareness among consumers. Brand awareness can be good or bad, depending on the reputation and perception of the brand.

Brand awareness metrics are vital for brands because they can understand how well their marketing efforts resonate with consumers and make strategic decisions accordingly. An organization should start measuring brand awareness as early as possible, ideally during the development and launching of a new product or brand. 

As of 2021, the most valuable brand in the world is technology giant Apple. According to Interbrand’s “Best Global Brands” report, Apple’s brand value is estimated at around $234 billion. Apple has consistently been ranked as the most valuable brand globally for several years, thanks to its strong reputation for innovation, design, and customer loyalty. The company also has a diverse product portfolio that includes iPhones, iPads, Macs, Apple Watches, AirPods, and services like the App Store, Apple Music, and iCloud.

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Other top brands worldwide include Google, Microsoft, Amazon, Coca-Cola, and Samsung, which also have strong brand values and reputations. These brands have a strong presence in their respective industries and consistently show strong financial performance.

It’s important to note that brand value is subjective and can fluctuate depending on factors such as market conditions and brand performance. Factors that cause brands to lose awareness include changes in consumer preferences, increased competition, and negative publicity.

The history of brand awareness research

The first examples of brand awareness research can be traced back to the early 20th century with the advent of advertising and the growth of consumer culture. 

One of the earliest examples of brand awareness research is the “Top of Mind” study, which was first conducted in the 1930s by George Gallup, the founder of the Gallup Poll. The study aimed to identify which brands were most frequently mentioned by consumers when asked to name a brand in a particular product category without any prompts or cues.

The “Top of Mind” study was a pioneering research method in brand awareness. Advertisers and marketers widely use “Top of Mind” research studies to understand consumer preferences and measure the effectiveness of advertising campaigns.

Additionally, in the 1940s, Louis Cheskin, an American psychologist and design consultant, developed the “Association Test,” which measured brand awareness and brand association by asking consumers to list the first word or phrase that comes to mind when thinking about a brand.

These early examples of brand awareness research laid the foundation for modern brand research and have been adapted and developed over the years to include more advanced methods and technologies such as online surveys, focus groups, and social media analytics.

Measuring brand awareness has changed over the years with the advent of new technology, such as online metrics and social media analytics. Modern technology has made researching brand awareness more efficient and cost-effective.

What is the best formula or method for measuring brand awareness?

There is no specific formula for measuring brand awareness, as the methods used can vary depending on the research objectives. 

There are different ways to measure brand awareness, and some methods include the following:

  1. Unaided recall: This method measures the percentage of people who can spontaneously recall a brand without any prompts or cues. It’s a measure of top-of-mind awareness.
  2. Aided recall: This method measures the percentage of people who can recall a brand after being prompted or given a list of options. It’s a measure of brand recognition.
  3. Brand association: This method measures the strength and relevance of consumers’ associations with a brand. It can be done by asking consumers to list the first word or phrase that comes to mind when thinking about a brand.
  4. Brand loyalty: This method measures the degree to which consumers are loyal to a brand. It can be done by asking consumers how likely they are to repurchase a brand or recommend it to others.
  5. Brand consideration: This method measures the degree to which a brand is considered by consumers when they are making a purchasing decision. It can be done by asking consumers if they would consider purchasing a brand in the future.
  6. Brand tracking: Brand tracking measures changes in brand awareness over time by conducting regular surveys and comparing the results.

Different methods may be more appropriate for different types of research and various industries. Additionally, the sample size, the formulated questions, and the study’s context should be considered when measuring brand awareness.

How do you calculate the value of a brand?

There are different ways to evaluate a brand or trademark, including: 

Brand Value: This is the most common method which measures the financial value a brand name or trademark contributes to the company. It is calculated using a combination of factors such as revenue, market share, customer loyalty, and brand awareness.

Brand Equity: This method refers to the added value that a brand name gives to a product or service beyond its functional attributes. Brand equity is built over time by creating positive associations in customers’ minds and can be measured by how consumers perceive the brand in terms of quality, reputation, and loyalty.

Brand Strength Index (BSI): This method calculates brand value by measuring the power of a brand in the marketplace. BSI takes into account factors such as brand loyalty, brand awareness, and brand perceptions.

Royalty Relief: This method calculates brand value by estimating the amount of money a company would have to pay to license the brand if it did not already own it. This method considers factors such as the brand’s strength, market conditions, and the company’s projected revenues.

Cost of Replication: This method calculates brand value by estimating the cost of creating an equivalent brand from scratch. This method considers factors such as the cost of developing the brand name, logo, and other intellectual property, as well as the cost of advertising and building brand awareness.

Brand Contribution: This method calculates brand value by estimating the revenue or profit a brand contributes to a company. This method takes into account factors such as market share, customer loyalty, and brand awareness.

Regardless of the method chosen, brand awareness is a critical aspect of a brand’s value. High levels of brand awareness can contribute to a strong reputation and customer loyalty and ultimately increase the financial value of the brand.

Can brands with higher awareness charge more?

While brand awareness is a key factor in a brand’s value, brands with a strong reputation for quality, for example, may be able to charge higher prices than others. Brands that have a loyal customer base and have built a strong emotional connection with them may also be able to charge a premium.

A brand with a strong level of awareness is often easier to license and can command a higher value for licensing agreements.

Consumers may be willing to pay a premium for a product or service from a brand they are familiar with and trust, as they perceive it to be of higher quality or offer more value than similar products from lesser-known brands.

Luxury brands may charge higher prices based on the exclusivity and prestige associated with the brand.

However, charging higher prices is only sometimes possible or appropriate for all brands. Brand awareness can be a factor in charging higher prices, but it is not the only one. It’s important to consider the competition, target market, brand reputation, positioning, and emotional connection with its customers. 

Additionally, it’s essential to ensure that the higher prices are justified by the brand’s value and that the prices are not too high to discourage potential customers.

How can brands grow their brand awareness?

Brands can help grow brand awareness by implementing various marketing strategies, such as:

  • Building a strong visual identity and consistent brand messaging
  • Investing in advertising and promotions
  • Building relationships with influencers and media outlets
  • Creating engaging and shareable content
  • Leveraging social media and digital marketing
  • Hosting events and sponsorships
  • Creating a strong customer service experience
  • Building a solid reputation and positive brand image

It’s important to note that while these strategies can help increase brand awareness, it’s crucial to tailor them to the specific audience and objectives of the brand and to measure the strategy’s effectiveness to ensure they are working.

What happens to brands that fail to measure brand awareness?

If a brand fails to build brand awareness, it can have many negative consequences. Some of the most significant ones include:

  1. Reduced sales: Without brand awareness, consumers may not be able to find or recognise a brand’s products or services, leading to reduced sales and revenue.
  2. Difficulty standing out in a crowded market: A lack of brand awareness can make it difficult for a brand to differentiate itself from competitors and stand out in a crowded market.
  3. Difficulty building customer loyalty: Without brand awareness, it can be difficult for a brand to build customer loyalty, as consumers may not have a strong emotional connection to the brand.
  4. Difficulty attracting new customers: Without brand awareness, it can be difficult for a brand to attract new customers, as they may not know that the brand exists or what it offers.
  5. Difficulty creating a strong reputation: Without brand awareness, it can be difficult for a brand to create a strong reputation and be perceived positively by consumers.
  6. Difficulty in launching new products or services: Without brand awareness, it can be difficult to launch new products or services, as consumers may not be familiar with the brand or its offering.
  7. Difficulty in expanding to new markets: Without brand awareness, a brand may find it difficult to expand to new markets, as consumers in those markets may not be familiar with the brand.
  8. Difficulty in negotiating with suppliers and partners: Without brand awareness, a brand may find it difficult to negotiate favourable terms with suppliers and partners, as they may not see the brand as a valuable partner.

Overall, building brand awareness is an important part of building a successful business. It helps to create a strong emotional connection with consumers, increase sales and revenue, and create a competitive advantage in the marketplace.

Can brands reverse a trend of declining awareness?

Reversing a trend of declining brand awareness can be a challenging task. Still, there are several strategies that brands can use to improve their brand awareness and regain consumer recognition and trust. Some of these strategies include:

  1. Re-evaluating brand positioning and messaging: Brands should review their current positioning and messaging to ensure they are relevant and resonate with consumers. They should re-position and re-brand themselves if necessary.
  2. Investing in advertising and promotions: Brands should invest in advertising and promotions to increase consumer exposure to the brand. This can include traditional advertising, such as TV and print ads, digital marketing, and social media advertising.
  3. Building relationships with influencers and media outlets: Brands should build relationships with influencers and media outlets to increase exposure and credibility.
  4. Creating engaging and shareable content: Brands should create engaging and shareable content such as videos, infographics, and blog posts to increase brand visibility and build an emotional connection with consumers.
  5. Leveraging social media: Brands should leverage social media to engage with consumers and build a community around the brand.
  6. Building a solid reputation and positive brand image: Brands should focus on building a strong reputation and positive brand image through positive customer experiences and word-of-mouth marketing.
  7. Reviewing and adjusting the customer service experience: Brands should review and adapt their customer service experience to ensure that it aligns with the brand’s values and goals and helps build a positive brand image.
  8. Investing in market research: Brands should invest in market research to understand the brand’s current awareness and perception and identify the areas that need improvement.

Reversing a trend of declining brand awareness takes time and effort, and it’s not a one-time task. Brands should continuously monitor and measure the effectiveness of their strategies and make adjustments as necessary.

What insight can be gained through a brand awareness research study?

When gathering information about brand awareness, areas that should be researched include consumer recognition and familiarity with the brand, brand loyalty, and brand perception. 

You can use metrics such as market share or brand recall to compare a brand’s brand awareness over its competitors. 

Gathering brand awareness metrics can be different in international or foreign markets, as cultural and language differences may affect consumer recognition and perception of the brand.

It is essential to use a variety of research methods and to consider factors such as sample size and representation so that the information gathered in brand awareness research is correct and trustworthy. 

Different types of brand awareness research include surveys, focus groups, and online metrics. 

Gathering information about the awareness of brands is important because it allows companies to understand how well their marketing efforts resonate with consumers and make strategic decisions accordingly.

What factors and steps should you consider when conducting a brand awareness study?

When researching brand awareness, important considerations include sample size, representation, and research methods. 

The steps for calculating brand awareness can vary depending on the specific research methods and objectives, but generally, the process includes the following steps:

  1. Define the research objectives: Identify the specific information you wish to gather about brand awareness, such as consumer recognition and familiarity with the brand, brand loyalty, and brand perception.
  2. Develop a research plan: Determine the research methods that will be used to gather information about brand awareness. This may include surveys, focus groups, or online metrics.
  3. Conduct the research: Use the research methods identified in the research plan to gather information about brand awareness.
  4. Analyze the data: Organise and analyse the data collected during the research phase to identify patterns and trends in brand awareness.
  5. Make strategic decisions: Use the insights gained from the research to make strategic decisions about how to improve brand awareness, such as adjusting marketing strategies or targeting specific groups of consumers.

Brand awareness should be measured regularly, depending on the brand’s specific needs and the industry. Some brands may measure brand awareness quarterly, while others may measure it annually. The frequency of measuring brand awareness also depends on the level of competition, the product or service, and the market conditions.

What types of questions are typically asked during brand awareness research?

When collecting information about brand awareness, it is important to include metrics such as consumer recognition and familiarity with the brand, brand loyalty, and brand perception. 

It’s important to remember that the research questions used, whether qualitative or quantitative, will depend on the survey’s specific research objectives and goals.

Several types of research questions should be asked to gather valuable information about consumer recognition and familiarity with the brand.

Some examples of these types of research questions include:

  1. Recognition: “Are you familiar with [brand name]?”
  2. Recall: “Can you name a brand in [product category]?”
  3. Top of mind: “What is the first brand that comes to mind when you think of [product category]?”
  4. Spontaneous: “What brand did you last purchase in [product category]?”
  5. Aided: “Can you name a brand of [product category] that you have seen advertised recently?”
  6. Unaided: “Can you name a brand of [product category] without any prompts or cues?”
  7. Brand loyalty: “Would you consider purchasing from [brand name] again in the future?”
  8. Brand preference: “Which brand of [product category] is your personal favourite?”
  9. Brand association: “What words or phrases come to mind when you think of [brand name]?”
  10. Brand perception: “How would you rate [brand name] in terms of quality, value, and customer service?”

After the data is collected, it is generally recommended to segment the responses to the brand awareness survey based on demographic factors such as race, age, income, and education. 

Segmenting the data in this way can help identify patterns or differences in brand awareness and perception among different groups of consumers. For example, segmenting responses by age can reveal discrepancies in brand recognition and loyalty among different age groups. Segmenting by income helps to understand how brand awareness and perception differ among consumers with different financial means. Segmenting by education can reveal how brand awareness and perception may vary among consumers with different levels of education.

It is important to note that demographic segmentation may not be suitable or appropriate in all cases, and it is essential to consider the ethical and legal implications of collecting and using demographic data in research. Additionally, it’s crucial to ensure that any data collected is handled and reported in a way that respects the privacy and confidentiality of survey participants.

It’s also important to remember that demographic segmentation is one of many ways to segment the data. Other ways to segment the data include:

  • Behavioural segmentation (e.g., purchase history, brand loyalty, frequency of purchase)
  • Psychographic segmentation (e.g., personality, values, lifestyle, interests)
  • Geographic segmentation (e.g., region, urban or rural)

Why consider a research partner like Kadence International to conduct your brand awareness research?

There are several reasons to use a research agency when conducting brand awareness studies.

  1. Expertise: Research agencies have the knowledge and experience in conducting research studies, including brand awareness studies. They can design a study tailored to the brand’s specific needs and provide actionable insights.
  2. Objectivity: Research agencies are independent of the brand, which can provide a more objective perspective on the brand’s awareness and perception.
  3. Resources: Research agencies typically have a wide range of resources, including staff, technology, and data collection tools, which can help conduct a brand awareness study.
  4. Time-saving: Outsourcing the research to a research agency can free up time for the brand to focus on other important tasks, such as building the brand or developing new products.

Using a research agency like Kadence International when conducting brand awareness studies can provide valuable expertise and objectivity.

Kadence International partners with the world’s largest and fast-growing, emerging brands to help them make game-changing decisions. If you would like to discuss your brand’s awareness and how research can help, please reach out. 

Pricing is a critical component of the marketing mix. Think about what drives shoppers to purchase a product or service. Is it brand value, product quality, level of customer service provided, design, or price? 

According to research, 60 percent of online shoppers globally consider pricing as the first criterion affecting their buying decision. In tough economic times, this percentage can rise by as much as 20 percent. 

Price is an important part of the marketing mix. When all things are equal, the price of a product or service is often a significant differentiator. Since the 1950s, the focus on the 4 Ps —product, price, place, and promotion —has been at the core of marketing. As the marketing mix has evolved beyond the 4Ps to include packaging, positioning, and people, pricing remains an important differentiator as it is transparent and easily comparable. It has been established that a one percent improvement in pricing raises profits by six percent. 

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With e-commerce, price analytics takes on another meaning. Price analytics for e-commerce helps brands track their competitors’ pricing changes and analyze how their own prices perform daily. This is why e-Commerce brands use competitive price analysis software to execute their pricing strategy.

Today, online shoppers have various tools, like Honey, that scour the internet to find the best prices. Many studies show that as much as 90 percent of online shoppers spend substantial time finding the best deals. 

What are the most used pricing models?

The cost-plus price model. 

When using the cost-plus model, companies determine the unit product costs for each product and then set a target profit margin. The profit margin is added on top of the cost of the products, often as a percentage. These costs are different for retail and e-commerce brands. While e-commerce businesses do not incur brick-and-mortar costs, such as store rent and utilities, they often include other costs, such as domain registration, website hosting, rent (if there is office space), online platform fees if that applies, software, bank processing fees, shipping and fulfilment costs, marketing, returns, and refunds, among others. 

Knowing the exact unit costs is critical, and so is arriving at a reasonable profit margin that makes the sale profitable while also considering what the customer is willing to pay. Pricing too low will undervalue the product or service, and pricing it too high will make it less competitive. 

For instance, luxury brands like Rolex can afford a massive profit margin because they know their target audience cares more about the brand image than the price. However, the same approach doesn’t work for fast fashion brands because the target audience is looking for affordable clothing and accessories; therefore, the product’s price needs to be competitive. 

When using the cost-plus pricing strategy, brands must thoroughly research their competitors’ pricing. 

Market-based pricing.

With many tools available to consumers, primarily online, they can easily compare prices of competing goods and services at a click of a button. Therefore, brands need to clearly understand how their competitors price their products and consider the market value and demand for them. However, brands entering a pricing war can risk losing out if they mark their products and services too low.

Using market-oriented and competitive pricing, brands can utilise the data to increase prices while maintaining competitiveness. 

By keeping an eye on the market and using competitor pricing software, eCommerce brands often raise prices just below the competitors’ so they stay competitive and increase profit margins. 

Dynamic pricing. 

Dynamic pricing, also known as surge pricing, is a time-based pricing model. It is a flexible approach to pricing based on market and customer demand. When using dynamic pricing, the prices of goods and services fluctuate based on their demand. For instance, if there is a big concert in town and lots of tourists are expected to attend, the prices of Uber rides, hotels, and airlines for that city will surge upwards. 

Hotels and airlines utilise online algorithms to price hotel rooms and airline tickets based on market demand to maximise profits and maintain a competitive edge. 

Bundle pricing.

Bundle pricing is a simple pricing strategy where brands sell a range of products together at a lower price than individual products or services. 

For instance, a cookware brand may sell its pot and pans in a bundle for less, or an electronics brand may sell a camera, with accessories, at a lower price.

Bundling products of a similar type allows retailers to increase the average order value. Many consumers find their purchase to be more valuable as they are likely to need other products or accessories that go with their purchase. It’s a good deal for all parties involved. 

Freemium pricing.

Freemium pricing is offered to acquire new customers. It offers your product or service for free for some time so that potential new customers can try your product for a limited time. Profit margins for freemium pricing are calculated based on converting free trial users or sign-ups.  

Freemium pricing is valuable because it gives you access to a new customer’s email, phone, or address so you can use marketing to nurture the customer over time so they purchase from you in the future.

For prospects who sign up for a free trial, they get to experience the product, lowering perceived risk and removing “buyer’s remorse”.

Freemium pricing is often seen with free trials of online software, where prospective users sign-up for a free trial use period. 

High-low pricing strategy.

Brands utilizing a high-low pricing strategy initially price their product at a high price but lower it when it loses its novelty value or relevance. 

An excellent example is Lululemon studio, a workout mirror launched as Mirror and later rebranded as Lululemon Studio. It recently dropped its price by 50 percent as more similar products entered the market. To learn more about the story behind Lululemon Studio, download our report here: 

Skimming pricing model.

Brands use the skimming pricing model when they initially offer a higher price for their product and gradually lower it as it loses market demand and becomes less popular. This pricing model differs from the high-low model because this strategy progressively reduces the price over a period of time.

Penetration pricing.

Brands often use the penetration pricing model when entering a new market or introducing a new product line with lower-than-market prices. These brands set their prices lower than the competing brands to lure customers. 

Price discrimination. 

Many eCommerce brands employ the price discrimination model, selling the same item at different prices to different buyers. This is a tailored approach based on the customers, not the product. 

Price discrimination can be used in the following ways:

  1. Consumers are in the driving seat; for instance, they might be offered free shipping or a lower price if they purchase a certain number of items or shop for a minimum amount. 
  2. Consumers bid for products, so they pay more than they may be willing to pay otherwise due to auctions on platforms like eBay. 
  3. Products are priced based on customer segments. This is done by utilizing customer order history and data to generate prices for specific customer segments. 

Psychological pricing.

Psychological pricing utilises human psychology to boost sales. When brands price items at 3.99 instead of 3.00 or 99.99 instead of 100.00, they use consumer psychology to increase sales.

This has intrigued researchers for years: How can rational consumers perceive a price ending in nine to be significantly lower than a price less than one percent higher?  

Research has shown consumers do not respond to minor price changes; however, recent research suggests that the last digit of a price can have a massive impact on a firm’s revenue. This is because we process data from left to right and perceive an item priced at 2.99, closer to 2.00 than 3.00, according to numerical cognition. 

Geographical Pricing.

In this pricing model, brands set prices based on the geographical location or market. 

How to price a product or service for international markets

Pricing can become even more complex when brands enter new international markets and various market forces and price structures come into play. 

So what determines a successful export pricing strategy? It includes assessing your company’s foreign market objectives, costs, demand and competition, transportation, taxes and duties, sales commissions, insurance, and financing. 

How do you adjust prices in markets where the currency exchange rates are much lower? In 1986, The Economist, a British weekly newspaper, invented the Big Mac Index, which measures the purchasing power parity between nations using the price of McDonald’s Big Mac as a benchmark to determine whether currencies are at their “proper” level. 

The Big Mac Index is based on the purchasing-power-parity theory, which suggests that exchange rates over time should move in the direction of equality across national borders in the price charged for an identical basket of goods, in this case, the Big Mac. 

The Big Mac Index was created as a lighthearted tool to measure the differences in consumer purchasing power between nations.

The idea was to make the exchange-rate theory easier to understand. But it has now become a global standard for brands entering new markets and academic studies.  

According to PPP theory, a change in the exchange rate between countries should be reflected in the price of a basket of goods.

The Big Mac Index is based on the premise that a basket of goods in one country can rarely be exactly duplicated in another country. For example, an Indonesian basket of groceries and a basket in England likely contain very different products. On the other hand, the Big Mac provides a fair comparison as apart from a few local ingredients, it’s the same product. 

The Big Mac Index isn’t the only method brands use to price their products and services in international markets. The GDP-adjusted index has challenged the Big Mac Index, suggesting the average burger prices should be cheaper in a country like India versus the U.S., based on lower labour costs. 

While the PPP theory addresses where exchange rates are headed in the future, it doesn’t factor in the current exchange rates. 

Many economists believe the relationship between prices and GDP per person is a better guide to assess the current fair value of a currency. 

Despite not being a perfect tool, the Big Mac Index is widely used by brands entering new markets. There are also similar PPP models, such as the Starbucks Index and the Apple iPhone index.

Pricing products during times of high inflation.

Inflation is back; for many brands, this means sustainably adjusting their pricing. This is a frequently discussed topic in boardrooms globally as organizations work toward strategies to cope with an inflationary market.

Strong demand in a post-pandemic world, supply chain disruptions due to extended lockdowns in China, Russian supplier sanctions, labour shortages, and rising fuel prices have resulted in cost volatility worldwide. Brands need to adjust their pricing to offset fluctuations and inflation without risking future revenue growth. 

Inflation is the rate of price increases that impacts the cost of living in a country over a given period. 

When the money supply grows too big compared to the size of an economy, the unit value of the currency reduces; in other words, its purchasing power falls, and prices go up. 

With inflation and a recession on the horizon, consumers are tightening their purse strings. High prices of fuel to food are impacting consumer spending. For brands, it often signals a need to get more creative, and eCommerce sellers are in a more favourable position to weather the economic downturn using competitive pricing software and data-rich touchpoints to inform better decision-making.

How to create a sustainable pricing strategy and stay competitive. 

Fix your current pricing strategy.

Focus on the easy wins and communicate your positioning to the consumers, like reducing less profitable SKUs and adjusting service pricing based on market trends, like shipping costs that have gone up over the past two years. 

Build a strategic pricing plan.

Build a structured pricing strategy based on a deep understanding of products and customers for improved retention and volume growth. 

Communicate effectively.

Communicate effectively internally to sales teams and externally to the consumers and public. Deliver customer-centric thinking, clearly communicate attributes and price points, and emphasise product uses and value. 

Provide transparency on price increases.

If it is necessary to increase the cost of your product based on an increase in logistics costs such as fuel and shipping, breaking out that cost separate from the product cost can help consumers separate any necessary price increases and why they are necessary.

Understand new consumer behaviours and revisit brand positioning.

Brands need to deeply understand the dramatic shifts in consumer behaviour over the last few years to manage high inflation. The pricing strategy should consider changes in post-pandemic behaviours and preferences. 

Best pricing strategies for high inflation rates

There are several pricing strategies to increase the price of your products ad services during an inflationary economy. Companies often use a combination of pricing strategies to combat high inflation. 

Cost-plus pricing model

During a period of high inflation, it helps when companies allow the product price to increase in line with the cost of the product. However, this pricing model can make a brand less competitive when used alone. 

Competitive pricing model

During inflation, your competitors also make price adjustments, so it is essential to utilise the competitive pricing model to stay ahead. 

The key-value item pricing model

During times of high inflation, brands can lure customers into their physical or online stores with discounted prices for best-selling products. Once in the door, they profit from their other purchases, so dividing products into key-value items and profit-margin items is best. 

Dynamic Pricing model

Dynamic pricing is an excellent strategy for companies selling multiple products during high inflation. This type of pricing uses competitive pricing software, AI, and algorithms to automate the price adjustment process. 

How can brands maintain quality without impacting price, even though their costs have increased?

Shrinkflation

A brand’s response to rising costs of goods and inflation depends on the product or service. There are many products for which consumers are more sensitive to changes in price rather than quantity. This is where downsizing or shrinkflation comes into play. 

Shrinkflation is the practice of reducing the product size in an attempt to maintain its sticker price. This is an excellent strategy, especially in the food and beverage industry, to boost profit margins or maintain profits during inflation. This is not a new practice and is not limited to inflationary times. However, when costs rise, brands utilise it to their advantage as it allows them to maintain quality while reducing prices. 

For instance, Simply Lemonade (and other juice brands) in the U.S. have gone from 64oz to 59oz to 52oz over the years while the price has remained the same or increased.

Earlier this year, the size of a Cadbury Dairy Milk chocolate bar was reduced by 10 percent and is available at the same price. The parent company, Mondolez, uses this tactic to combat the rising costs of producing chocolate bars to provide consumers with the same taste and quality without increasing prices. 

Skimpflation

Yet another practice brands use to combat inflationary environments is skimpflation. As the name suggests, skimpflation refers to skimping on service or quality to cut costs. For instance, airlines may stop serving meals, or hotels may reduce the number of times they offer housekeeping services. Airport lounges or hotels may skimp on the hot meals or free breakfasts and offer pre-packaged cereal and bars instead. Brands may also choose to swap out more expensive ingredients with cheaper substitutes. However, there is always the risk of losing consumers if they find the difference noticeable. 

Brands globally are facing enormous challenges due to socio-political issues and supply-chain problems. They must become creative to offset rising materials, gas, and labour costs to maintain profitability. The use of sound pricing strategies, retaining positioning, and communicating the brand’s position with internal and external stakeholders are critical measures in product pricing. 

How market research helps brands determine the optimal pricing. 

Market research has developed several approaches to price optimisation widely used to evaluate optimal pricing for different products and innovations. They include direct methods, such as estimation of willingness to pay, indirect methods, such as Gabor-Granger and Van Westendorp techniques, and product/ price mix methodologies, such as several discrete choice methods. 

Gabor-Granger Vs. Van Westendorp pricing techniques

The Gabor-Granger method is used to measure the elasticity of demand. It determines how much a potential customer is willing to pay for a product or service. For instance, a brand may show a camera to its customers and ask them how much they are willing to pay for it. But this may be too simplistic for certain cases because there is always a range when consumers think of pricing. Also, not every customer who is offered the camera at the price point determined via this method will be willing to purchase it at that price. 

The Van Westendorp

The Van Westendorp is one of the most commonly used pricing techniques that help customers understand such price ranges. It may ask multiple questions, like at what price is it s low that they would doubt product quality, at what price they would consider the camera to be a bargain, at what price is it too expensive, and so forth. This p[rovides more insights into the price range and a better understanding of the consumer’s mindset. 

Both methods have their place depending on the situation. When a brand has little or no idea about the price range from the customer’s standpoint, it is better to use the Van Westendorp pricing method. Once the range is known, the  Gabor-Granger pricing technique can be used to measure demand elasticity to discover price points at which a brand can maximise revenue.

Purchase intent testing

Consumers may want a product or service, but this doesn’t necessarily mean they are willing to open their wallets and purchase them. 

Purchase intent testing is a concept testing approach related to pricing, which helps determine if people will purchase your product or service at your desired price.

Many brands test the product without the price first to estimate consumer interest and later add the price to determine purchase intent. 

For instance, the pioneering Electric Vehicle brand Tesla conducted purchase intent testing for a car model before it even designed it.

It is paramount to get the product pricing right. Pricing products is an art and skill that makes brands calculate how much human behaviour impacts how people perceive price and value. A pricing strategy is used to determine and establish the best price for a product or service to maximise profitability and shareholder value while assessing consumer demand and perception.

Kadence International helps brands worldwide understand the importance and impact of price on demand. If you would like to increase demand or profit by developing a deeper understanding of how price impacts growth, please contact our team for more information.