You probably won’t read this article word for word—and you’re not alone. Humans typically respond to visual stimuli by paying attention to some things more than others. They skim over some words, re-read others, and skip entire sections.

How a person’s eye moves around a page, design, or space reveals a lot about what does—and doesn’t—capture their attention. That’s why cutting-edge eye-tracking technology is growing in demand among market research professionals.

Eye-tracking is a powerful tool for gathering, analyzing, and utilizing data about what goes on in consumers’ minds. Those insights can be used to optimize brand performance and improve marketing ROI.

Read on to learn more about the fundamentals of eye-tracking technology and its uses in market research.

What is eye-tracking?

Eye-tracking is a research methodology for measuring where a person looks, providing insight into their thinking.

Using machine learning and advanced image processing, it’s possible to record almost everything about how the eye interacts with something in front of it.

This real-time data can be helpful in market research. It allows for a deeper understanding of consumer reactions to almost any visual stimulus, from a website or technology platform to product packaging or an in-store display.

Eye-tracking unlocks the unconscious decision-making process. It gives marketers quantifiable data about user intention, where their interest lies, what they overlook, and how they respond to different stimuli.

This data humanizes technology, creating intuitive solutions that meet consumers’ actual needs and desires.

How does eye tracking work?

Eye-tracking technology uses near-infrared light and high-resolution cameras to track how the eye moves in response to stimuli.

  1. Light is directed toward the center of the eye to create reflections in the pupil and cornea. Infrared light is invisible; it doesn’t distract or harm the eyes.
  2. A camera records the reflections (called pupil center corneal reflection or PCCR), tracking the person’s exact point of focus.
  3. Advanced mathematical algorithms calculate various data points, such as eye position, gaze or focus point, duration of attention, eye openness, blink rate, and changes in pupil diameter.
  4. The data processed by eye tracking software helps researchers understand where, when, and what people viewed.

The exact data a researcher collects depends on the hardware and software they select from the many companies that offer the technology. 

Some tools also integrate biometric data, like heart rate and galvanic skin response, to add depth to findings. Also, a similar head tracking technology monitors the position and movements of the head. It can be combined with eye tracking to uncover more meaningful data.

There are two main types of eye-tracking technology: 

Screen-based devices

● Participants sit in front of and interact with a computer screen that has a stationary unit mounted below or nearby. Movement is limited within the static area.

● Recommended for controlled environments. Webcam options can be used in a participants’ home, but proper calibration isn’t guaranteed and can negatively affect results.

● Ideal for screen-based materials (pictures, videos, and websites) or static offline stimuli (packaging, magazines, books).

Head-mounted devices

● Wearable devices are integrated into eyeglass frames or inside a virtual reality headset, allowing users to move freely around a space.

● A large amount of movement, as with sports, could cause glasses to shift during recording and negatively affect results.

● Ideal for performing tasks in a real-life or virtual environment (shopping, usability studies, product testing).

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What does eye-tracking measure?

This advanced technology can measure almost anything about the eye, but what does the information tell us?

Gaze Point

Discover where a user’s eyes look at a rate of up to 60 points per second. This tells you exactly how long the eye fixates on an object or area or what actually generates visual attention.

Scan Patterns

Plotting out where the eye fixates in chronological order creates a visual path that reveals how consumers tend to scan something. This can help determine whether the information is logically and efficiently organized.

Heat Map

Aggregate data showing the distribution of users’ focus points to understand what consumers are most and least likely to notice. The larger your sample pool, the more you can determine differences in how various populations view the same object or space.

Areas of Interest (AOI)

Measure specific areas of a video, website, package, or display to determine how long it takes a user to notice something, how many people notice an AOI, how long they view the area, and how often they return to an AOI. You can also compare the performance of separate areas.

Using eye tracking in market research

The eye-tracking market is exploding, expected to reach nearly $1.1 billion by 2025, up from $368 million in 2020. Clearly, the data this technology generates is valuable.

Let’s explore exactly how to use this information in marketing research.

●     In-Store: Head-mounted eye tracking is highly effective for evaluating store navigation, signage, and product displays. Rather than using unreliable recall methods, customers walk around a store (or a VR simulation). At the same time, the technology captures the path they take, what draws their attention, and what they ignore.

●     Packaging design: Before releasing a product, eye tracking can test how well users respond to the various elements. This type of testing is particularly well-suited to A/B testing that compares two or several options to see which generates the most fixations on key AOIs. 

●     Website: To deliver the best user experience on a website, it helps get inside the consumer’s mind. Eye-tracking is the most effective way to test what elements of a site capture attention (or cause someone to click away), and what influences desired actions. Initial and follow-up retesting can determine what messages, fonts, colours, and placements best attract and retain leads, dramatically increasing marketing ROI.

●     Advertising: Eye tracking can help assess the success of print or digital advertising communication—what does and does not draw attention. It’s also an effective tool for testing changes to see what improves results.

Regardless of the visual stimulus tested, eye tracking can help determine which elements attract immediate attention or above-average attention and in which order they’re viewed, as well as what is ignored or, perhaps, misunderstood.

Market researchers can propose changes that improve usability, effectiveness, and overall customer experience with this data. Best of all, the technology can be used to retest new iterations to determine how successful they are at improving desired results.

It’s important to note that eye-tracking falls short in determining the psychology behind a user’s actions. It can provide accurate data about what, where, and for how long a person looks, but understanding motivation requires other market research methodologies, such as surveys and interviews.

What industries can use eye-tracking?

As eye-tracking technology continues to become more affordable and more widely understood, it’s not surprising it’s attracting more users.

While applicable to many industries, the technology is commonly used for market research on various commercial sectors. Bank branches, car dealerships, groceries, malls, and other retail environments frequently employ the technology to better understand and improve the customer experience.

Eye-tracking is also vital in technology, becoming a more frequent interface method for computers, phones, video games, and televisions.

Finally, the methodology contributes to advancements in automotive safety, workplace safety, medical diagnoses, and accessibility for people with disabilities.

What are the pros and cons of eye-tracking for market research?

Modern eye-tracking technology has been used for market research since the 1980s. It endures because it of three key benefits:

●     Unique: Eye tracking reveals what other data collection methods cannot. It shows what a user actually looks at and ignores and how they scan an object or a space.

●     Reliable: Very little market research is 100% accurate, but eye-tracking precisely captures eye movements down to milliseconds. It provides an accurate history of the what, where, and how of viewing patterns (interpretation of the why is a different story).

●     Easy Testing: You can immediately test a hypothesis about what might improve the visual performance of a website, package, or display. Make the change, then see if it had the expected effect on the user’s view.

Despite the many benefits, there remain a few challenges with using eye-tracking technology in marketing research.

●     Cost: Eye-tracking studies require money, time, and labour. The equipment and training can be pricey. Plus, each device can record only one person at a time, so it takes a great deal of time to get a meaningful sample size.

(For researchers with budget constraints, tools like Hotjar’s Heatmaps and Mouseflow may be an affordable alternative. They show where a mouse hovers. While not perfect, there’s some correlation between where a person points the mouse and where their eyes move.)

●     Limitations: Eye-tracking technology can be less effective for participants who wear contacts or glasses or squint. Also, incorrectly calibrated trackers or head-mounted devices that shift can invalidate results.

●     Bias: The Hawthorne Effect, or a person changing their behaviour when they know they’re being observed, may create some degree of error with results. Likewise, there is always some bias in data interpretation or deciding the “why” behind the eye movements.

Best practices for eye tracking in market research

Eye-tracking technology is not a one-size-fits-all solution. It’s also not the best and only option for market research.

In truth, eye tracking is best combined with other research methodologies, such as interviews and surveys. Using eye-tracking in conjunction with other tools is the best way to ensure more accurate results.

Many researchers prefer to use eye tracking in the latter stages of market research as a diagnostic tool. It can be used to test a few solutions to perceived problems. For example, if people aren’t clicking through a website as desired, eye tracking can be used to test whether a button in a different colour or location improves results.

Summary

According to research from Harvard Business School, 95 per cent of purchase decision-making occurs in the subconscious mind. That’s why many market researchers rely on eye-tracking. It’s a powerful tool for understanding what goes on in consumers’ minds. 

While not failproof, eye tracking provides reliable data about how a person views the world in front of them. Those insights can be valuable in optimizing websites, product packaging, store displays, and most importantly, improving marketing ROI.

As soon as you think you understand market research, something brand new comes along to challenge everything you thought you knew. With the rapid evolution of technology, those moments seem to be happening more than ever.

Today’s market research campaign looks very different from how it would ten or even five years ago, and technology is one of the major driving forces behind the evolution of market research. Every year brings a slew of new tools, techniques, and platforms built to make research more accessible and more effective.

In this article, we’ll take a look at some of the most important things that have changed in market research due to technology, and we’ll also explore what new changes could be lying in wait in the near future.

Market research technology: what has changed?

Over the last several years, there have been several significant technological changes that have impacted market research. 

Technology has changed how industries operate, and market research is no exception. Advancements in technology have seen a rise in the self-service model, where brands can implement their own short surveys. But perhaps the most significant impact technology has had on the market research industry is agility. Market research technology allows researchers to quickly test, measure, and pivot projects.

Technology allows traditional research briefs to move past online surveys. For example, eye-tracking technology enables researchers to observe shoppers exhibiting their natural behaviours while walking around a real or virtual store, making note of fixation and gaze points. This can be highly revealing in usability studies, product and package testing, and shopping research.

Here are some of the main forces driving the evolution of market research.

Social media

It’s hard to believe that social media has only been around since the early 2000s. In the two decades since its inception, social media has transformed our lives, and market research is no exception.

Social media platforms like Facebook, Twitter, Instagram, and more offer unique insights into your market and customers. These platforms are home to enormous reservoirs of data on your audience, providing unfiltered and direct feedback around how they’re feeling, what they want, their pain points, and hopes and desires. It’s also easier than ever to share surveys and questionnaires, collect attendees for focus groups, and much more.

Another benefit of social media is more accessible competitor analysis, allowing you to gain an easy glimpse into what other companies in your space are doing and saying, what marketing techniques they are using, and what’s working.

Observing customer behaviour

The explosion in personal technology devices like smartphones, IoT gadgets, Alexa, smart cars, and wearables make it far easier to observe the behaviour of your audience members and collect valuable insights in real-time. Even mobile apps can collect customer data and establish behaviour patterns.

Wearable technology is one of the most recent developments in this area. Gadgets like the Oura Ring, Fitbit, Apple Watch, Rayban stories, and much more allow researchers to observe customer behaviour as it takes place naturally in the real world. This gives a unique insight into how customers behave that can never be truly replicated in experimental conditions and can pick up on responses that customers themselves might not even notice.

Automation

It’s never been easier to analyze data and draw valuable conclusions, thanks to the vast leaps made in automation technology in recent years. The growing amount of audience data available to marketers can now be processed and analyzed much more efficiently, allowing you to gain valuable insights and learn as much as possible about your customers and how they behave.

Chatbots are another example of the power of automation in market research. These tools can ask questions and conduct basic surveys from social media apps and websites, allowing you to communicate with customers and collect valuable information in seconds without relying on time-consuming manual work by human staff.

Increased reliance on video and remote collaboration

Spurred on by the pandemic, video collaboration tools, and remote meetings have skyrocketed in popularity and ease of access. There are many advantages to this for market research, such as a shift away from in-person focus groups. 

Researchers no longer need to hire a venue, convince large numbers of people to take the time out of their day to attend, employ multiple staff on the ground, and do all the other logistical tasks involved in a physical interview. Instead, the whole thing can occur via a Zoom call, saving enormous amounts of time and resources for both interviewer and interviewees. This also allows you to contact a much broader sample of participants without being bound by geographic location.

Reach much larger and more diverse audiences 

Not so long ago, market researchers were confined to methods like postal surveys, local interview sessions, and phone calls. Technology — specifically the internet — has allowed researchers to radically expand their horizons, reaching audiences in far-flung parts of the country and even distant parts of the world.

It’s now easy to conduct real-time interviews and focus groups with people several timezones away, allowing companies to gain a much bigger and richer picture of their audiences. This is especially important for international market research but is also helpful to achieve a complete understanding of your audience as a whole.

Build richer buyer personas

As it becomes increasingly easier to collect data from your audience and analyze it in vast amounts, it becomes possible to build much richer and more detailed profiles for your audience members.

The buyer personas of the past were often vague, two-dimensional things, often built around vague generalizations and assumptions. The small amount of data available to researchers decades ago made it challenging to construct genuinely accurate and useful personas.

Today, with the enormous amount of data made available by technology and the internet, you can learn a lot about the people in your audience and build genuinely valuable and richly detailed buyer personas to inform your marketing decisions, product development, and much more.

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What the future holds for market research technology

As time goes on, market research will likely continue to evolve, driven by entirely new advancements in technology. Some of these developments will come as a surprise and may be unexpected side-effects of existing or planned technology. We can also predict some future trends based on what we already know.

Tools like AR and VR

Virtual reality and augmented reality open up a whole host of exciting new possibilities for market research. Both tools allow for much more interactive research where participants can use products and experience services in a completely immersive way without leaving their homes.

This makes it much easier to gauge responses, observe behaviour, and collect meaningful feedback without shipping large amounts of physical products to participants’ homes or asking them to travel to a research site.

One example is how Kadence worked with Asahi, using augmented reality to research a new packaging design. Participants used AR to generate models of beer bottles, allowing them to visualize what the bottle would look like in their own homes and provide more accurate and detailed feedback around specific details.

More use of voice assistants

Today, voice assistants are already popular, with tools like Siri and Alexa quickly becoming a central part of people’s everyday lives. These voice tools allow a unique insight into customers’ daily experience and behaviour, and if this data can be collected ethically, it has excellent value for market researchers.

More agility

Increased agility is a fascinating prospect for market researchers as technology advances. In the past, researchers were forced to take risky gambles instead of using a more flexible approach and making adjustments as needed.

With the ubiquity of data in today’s world, businesses can now take a more agile approach to market research, making quick and frequent changes and course corrections in response to the feedback they get from various channels. This trend could mark one of the most significant changes in how we conduct research over the coming years and suggests a step away from over-reliance on guesswork and individual opinion.

Technology has had an enormous impact on how businesses conduct market research, and as time goes on, that impact is likely to increase. The best thing market researchers and companies can do is be open-minded and prepared to embrace new technologies as they evolve.

At Kadence, we can help you harness all the newest and future technologies to conduct market research most productively and effectively, gaining valuable insights into your audience and getting ahead of the competition. Find out more.

The market research industry in India is thriving, but it is not without its’ own challenges and complexities.

Size of the Market Research industry in India

According to Statista, the size of the market research industry globally is around US$74 billion, with more than half (US$47 billion) coming from within the U.S. At roughly Rs.1500 crore or US$15 billion (2017-18), the Market Research industry in India may be smaller in comparison. Still, it is the fastest-growing market globally, growing by an average of 10 per cent per year, compared to the industry’s global growth of just over 2 per cent in recent years. Most of India’s market research comes from overseas brands.

What makes India a favourable outsourcing destination for Market Research firms?

The overseas demand is mainly due to the enormous cost advantages of conducting market research in India. The processing of data is about 50% cheaper in India than in developed nations. Therefore, the outsourcing business is doubling in value every year.

The rising middle class comprises young people who are very familiar with U.S. brands. India has the second-largest population of English speakers globally, coupled with a relatively stable political backdrop. These factors make India an attractive country for international companies.

India has also developed a pool of trained market research professionals who can provide companies with superior study methodologies, data processing, analysis, and reporting, making India an attractive outsourcing destination. 

What are the high-growth sectors in Market Research in India?

India is evolving into a ‘Service Economy’ with telecom, retail, and financial services as the high-growth market research sectors. Marketing research in India has been focused more on fast-moving consumer goods (FMCG). Besides these, India’s most significant growth area for the market research industry is the media measurement business, followed by the auto, telecom, healthcare sectors, durable goods industries, and the public sector. Market research is mainly focused on customer insights and satisfaction in all industry sectors. 

What are the challenges of conducting Market Research in India?

India faces unique, complex challenges because it can be viewed more as a continent than a country. This is because of many diverse cultures, customs, behaviour, languages, and even regional dialects. 

In India, one size does not fit all. Researchers need to understand the cultural nuances peculiar to different parts of the country when designing surveys and studies and selecting local markets. 

To obtain data for nationwide studies, market research firms in India have to target multiple cities, each with its language and cultural nuances. While Indian market researchers understand and know how to work within the complexities, it becomes challenging to warrant the high costs of conducting national studies to clients. 

On the plus side, this has helped Indian researchers attain higher standards of conducting studies. However, it is also true that it is difficult to attract high-quality research talent in India due to relatively lower salaries. While Indian companies understand the importance of Market Research and use it effectively, they are amongst the most demanding but lowest paying countries for market research.

One of the biggest challenges is the size of the country. In the past, with fewer households having access to phones, it was challenging to conduct market research. In 1997, less than one percent of the population had access to a telephone, and with low literacy rates, telephone and mail surveys were non-existent. However, in recent years, technology has lifted many barriers to market research in India.  

India’s digital journey has been remarkable. The number of internet users grew from 0.62 million in 2010 to 843.06 million in 2021 (the second-largest in the world). Estimates suggest that this figure would reach over 1.5 billion by 2040, and Smartphone usage far surpasses desktop and laptop usage. Today, smartphones are present in 84% of households. (Source: Statista)

These developments are a massive advantage in a country the size of India because the cost savings from using the internet or phone over face-to-face interactions are enormous. The rise in social media usage has also immensely helped the growth of market research in India. 

Face-to-face research was dominant before the pandemic; however, the first wave of COVID-19 pandemic and the lockdown helped speed up digitization, making it easier to use technology and social media for research studies.

beverage-trends-report
What is the state of market research in Rural India?

Nearly 70% of India’s population lives in rural areas, and the rural market has been growing five times as much as the urban market. However, doing market research in the rural areas of India remains cost-prohibitive due to the size of the country and its hugely diverse population. Additionally, largely rural population groups have not seen the technological breakthroughs and are beyond reach in many ways. 

During the pandemic, there has been an upsurge in digitizing rural India. The government has been pushing the adoption of digital technology in rural areas for many years now, but during the lockdown, it gained momentum. 

During the first pandemic wave, many jobless migrant workers had to go back to their villages from the cities, which triggered a rise in rural digitization. 

Still, market research firms face many challenges when it comes to the evolving, post-pandemic rural population. Furthermore, the complexities of hyper localization in languages, dialects, and traditions are even more pronounced in rural areas than urban centres. 

How did the sudden spike in mobile internet penetration further help the growth of the market research industry in India?

The availability of cheap smartphones in India since 2010 laid the foundation for digital literacy and adoption. Furthermore, the Indian government understood the importance of investments in its telecommunications sector and further deregulated the industry. 

In 2016, Reliance Jio disrupted the Indian telecommunications market by offering cheap 4G, high-speed data plans with free voice calling. This competitive data pricing pushed other telecom providers to drive down their pricing and led to a cumulative growth in affordable mobile internet accessibility amongst the Indian masses. 

What challenges do Indian Market Research companies (in particular) face?

In India, market research firms deal with the most demanding but lowest-paying clients in the industry. This makes it very difficult to attract top talent of market research professionals as the salaries are relatively lower. Industry attrition in Indian market research firms is high at about 30%, and people leave due to low salaries. 

The Future of Market Research In India

The growth of Market Research in India is clearly on the rise and shows no signs of stopping, despite the challenges. The market research industry in India is over three decades old. In recent years, there has been a rapid rise in the number of Indian Market Research firms and the interest of U.S. and European firms in outsourcing market research work to India. Companies in developed nations have 40-60% cost savings when they outsource market research to India. 

Telecommunication disruptions, technological developments, the rising middle class, a young country familiar with International brands, and lower research costs in India have led to growth in the market research industry. 

Market research is critical to building a robust business plan, and while many companies understand this, it is costly and time-consuming to undertake market research. Market research firms are more pressed than ever to deliver accurate insights and solutions to help companies make the right decisions while keeping turnaround times shorter and costs lower. 

guide-to-product-marketing
Artificial Intelligence (AI), machine learning, and big data are changing how Market Research is carried out.

Organizations use many traditional market research techniques to learn more about their customers. Traditionally, these include interviews, surveys, focus groups, and market reports, which are costly and time-consuming. The Market Research industry in India now has access to and is adopting new technologies to collect, analyze, and present data faster yet accurately. 

Indian market researchers are using social media, advanced analytics, and data collection. 

New developments like Artificial Intelligence, machine learning, and ‘big data‘ offer a viable solution. This also means expanding the skill set of the researchers so they can effectively employ these market research methodologies for streamlining and automating data collection and analysis. AI can also scan market data in any language, which can be invaluable in a multilingual country like India. 

The rapid rise in the number of Indian Market Research firms and the growing demand from international agencies in outsourcing to India show promising potential for the future growth of Market Research in India.

Although many challenges lay ahead, there will always be a need for high-quality, flexible market researchers. While technology and automation may be invading the market researcher’s territory, you still need people to uncover data and insights. The best market research teams of the future will combine techies and problem solvers, who will use technology to streamline and speed up their studies. A good quality, accurate, fast, and lower-cost research workforce will ensure India’s future growth as a market research provider to the western world. 

With the growing global demand for cost-effective and high-quality market research, the rising trust in Indian researchers, and the value of the Indian market, the future of market research in India looks promising.

Selecting an Indian Market Research Agency 
Kadence India

With many providers to choose from, appointing an agency for your next market research project that understands your unique research needs is crucial. If you are looking to conduct market research, selecting an agency with national expertise is a must. 

At Kadence International, we have offices in 10 countries, including India. Our office in India is recognized as one of the leading market research companies in the country.

With a Head Office in New Delhi, our diverse team has hundreds of years of collective market research expertise and speaks 12 different dialects.

We would welcome the chance to discuss your next market research project. Learn more about our Indian Office here or submit your market research project here.

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Understanding your customers is key to business success. Learn how to make your products or services meet customer pain points along the customer journey.

Customers make or break businesses. Companies that meet buyers’ needs are more profitable, while those that don’t will lose buyers and may fail.

Even so, some businesses pay little to no attention to customers’ expectations. Instead, they chase trends or ideas from their top brass, assuming that they know what interests buyers. Companies that check on customer needs often don’t do so frequently enough to keep up with the rapidly changing world.

This guide is about understanding customer needs—what they are, why they matter, how to identify them, and how to use them to win more customers.

What are Customer Needs?

Simply put, customer needs are the physical or psychological factors that motivate a person to purchase a particular product or service. These can be as varied as the hundreds or millions of customers in your marketplace.

Physical motivators are anything that has a measurable or tangible cause. If a person is hungry, they’ll buy food. If they’re cold, they’ll buy a coat. If their car breaks down, they’ll have it repaired.

Psychological needs are emotional reasons for purchase, and they’re almost always more important than physical needs. Any food, coat, or repair shop would solve the problems above, so how does someone pick where to make their purchase?

Opinions, desires, and preferences shape most purchasing decisions. That’s why things like convenience, pricing, reliability, reputation, service, and values often lead customers to choose one company over the competition.

“Customer needs” are often called “pain points.” While not all marketing professionals agree that these terms are interchangeable, they are indeed similar. Customer pain points are specific problems that people need help solving. Pain points can happen all along the customer journey and can include any physical or psychological issues that stand in the way of their happiness, growth, or success.

No matter what term you use, understanding what motivates buyers in your marketplace is key to winning new business and keeping loyal customers.

Importance of Understanding Customer Needs

customer profiles

As the saying goes, the customer is king because they’re a company’s most valuable asset. Without a solid customer base, a business will eventually die.

Unfortunately, many sales and marketing leaders take for granted that they know what their customers need. These assumptions can be costly, resulting in lost business and lower customer retention rates.

Other organizations view customer feedback as criticism, which may have a negative connotation. Leaning into their critiques, however, allows you to flip problems into opportunities.

When a business takes the time to identify, anticipate, and meet customer needs regularly, it can expect to:

● Improve products/services: Understanding the motivations behind your prospective customers’ purchasing decisions will help you refine your offers. You can identify gaps in your offer stack or enhance existing offers with only limited development costs.

● Generate more sales: The better you know your customer base, the easier it will be to identify relevant marketing channels and cost-effectively promote targeted offers, increasing the likelihood of high-conversion sales.

● Deliver expected results: When you know what your customers need, you can plan appropriately to meet their expectations.

● Improve customer service: Customer service channels constantly evolve, so it’s imperative to keep up with customer preferences. Being available to customers where and when they prefer makes them feel valued and can give your company a distinct competitive edge.

● Boost customer retention: Anticipating, meeting, and even exceeding customers’ needs establishes trust and makes them feel valued and engaged in your business. This, in turn, creates loyal and repeat customers.

● Survive long term: Agile adaptation is key to long-term success in a fast-paced world where the customer needs frequently change. When your offers suit current needs, you’ll develop a reputation that attracts and retains more customers than the competition.

Managing Rapid Change

Another significant benefit of customer needs analysis is ensuring that your company keeps pace in a rapidly changing world.

One of the biggest challenges any company faces is remaining relevant to its target market in the modern world. Customer mindsets and behaviours change so quickly because they have more choice and opportunity than ever.

When consumers can easily switch to a new company with better products or services, it’s imperative to anticipate, predict, and plan for the future. Falling a step behind is a quick path to losing market share.

For example, the recent shift to mass homeworking and the international uptick in tech solutions to support the change has created entirely new pain points for millions of people.

In a short amount of time, the pandemic taught nearly everyone how to communicate online. Zoom has made tech-deficient industries like food service more accessible and shifted many consumers’ preferences from in-person or in-home to virtual options (even in once digital-resistant markets like Asia).

These types of changes have far-reaching tentacles that can affect consumer needs across a wide range of industries.

Avoid the temptation to use customer research as a tool for reflection. Instead, bring a wide-angle lens to work and examine what’s happening in your industry now and in the months and years ahead.

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How to Identify Customer Needs

Understanding your customers shouldn’t be a guessing game based on experience or hunches. To get inside your customer’s mindset, you need to learn who they are and exactly why they need your product or service. The best way to do this is by asking them directly.

A customer needs analysis helps determine a company’s position in its market or how it compares to the competition in meeting customer needs.The insights can be used to change offers, marketing, and customer service to deliver the best possible value.

The first step in this process is to conduct customer research to understand customer behaviour. You’ll use this information to create personas that provide a detailed description of your target audience.

There are several tried-and-true methods for gathering helpful customer feedback. While any one of them can be beneficial, you’ll get the most robust picture of customer needs by using more than one.

Conducting Customer Needs Research

The easiest way to identify your customers’ needs is to ask them. The goal of market research is to learn about your best customers’ backgrounds, what drives their purchasing decisions, their expectations for your product or service, and what challenges may prevent their satisfaction.

The most common tools for this type of research include:

1. Customer interviews

The most direct way to collect data is by having one-on-one conversations with existing customers. Interviews typically elicit the most detailed answers, but customers may be less forthcoming without the promise of anonymity.

2. Focus groups

Pulling together a small group of handpicked customers is a quick way to get more feedback. Hiring a market research firm allows participants to speak candidly. On the downside, individuals can sometimes become influenced by the opinions of others in the group.

3. Surveys

The fastest and most cost-effective method for gathering information from a large group of customers is a survey, typically using an online tool. On the downside, response rates tend to drop if the survey is too long or detailed, limiting how much information they provide.

With any of these methods, you’ll first need to craft questions that elicit the type of feedback you’re seeking. After gathering demographic information (age, marital status, location, occupation, etc.), it’s best to devise open-ended questions that allow the customer the freedom to say anything without outside influence.

A few examples of helpful market research questions include:

  • What specific problem were you trying to solve when you chose our product/service?
  • What made you choose us over a competitor?
  • How well does our product/service meet your needs?
  • What do you like most/least about our product/service?
  • What challenges have you encountered with our product/service?
  • What do you wish our product/service could do?
  • How would you rate your experience with us?
  • Would you recommend us to others (why/why not)?

Questions should primarily focus on your brand, competitors, and customers’ buying behaviour and mindset. This may also include asking broader questions about their overall values, interests, and opinions.

While nothing is quite as valuable as a customer’s own words, using social media listening or keyword research can provide valuable insights without speaking directly with a person.

Social media listening is the process of analyzing online conversations and trends related to your brand and to your industry as a whole. It goes beyond monitoring basic metrics like mentions and followers to consider the mood behind the data instead.

People frequently use Facebook, Instagram, and Twitter to candidly discuss products and services. Watching for real-time feedback about what they like and don’t like about your company or your competitors is a great way to identify opportunities for change or growth.

Keyword research looks at the popular keywords and terms related to your product or service that people type into search engines. For example, try typing an industry-related question into Google’s search bar and see what auto-suggestions pop up. This is a good glimpse into what problems your customers are trying to solve.

Also, use a tool like Moz Keyword Explorer or SEMrush to research words related to your offer and find similar keywords. Check the average search volume to determine what language your customers and prospects use to describe their needs.

Creating Customer Personas

target personnas

It’s a good idea to turn data you collect during customer research into a customer or buyer persona. This fictional representation of your ideal customer will ensure that every part of the customer experience is tailored to their needs.

Focus on your best, most loyal customers. What are the patterns and commonalities among them? What demographics do they share? What are their similar experiences, motivations, and opinions?

Distil all the data into one profile that includes the most common demographics and interests. Include answers to what needs, and pain points brought them to your solution, what considerations went into their purchasing decision, what objections they had, the competitors they considered, and what made them purchase from you.

If you serve multiple market segments or different types of customers, you may need more than one persona to address each group.

This fictional profile provides a simple, actionable snapshot of your prospective customers’ mindset and behaviours. It reveals the specific needs that drive them to choose you, a competitor, or no solution at all.

Customer personas typically include a fake name, stock photo, and beautiful design, but it’s unnecessary. Sharing the same information as a “customer needs statement” in a basic text document is also perfectly acceptable.

Either way, share the profile with your team to give everyone a deeper understanding of your customers’ needs. These profiles should guide everything from product development to prioritizing projects and marketing campaigns to customer service solutions.

Understanding Customer Behaviour

Good customer research should uncover the many factors influencing your ideal customers’ purchasing decisions. The best research is robust enough to determine how customer mindset and behaviours change at various points along the customer journey.

The strategic practice of detailing these changes is called journey mapping. The goal is to outline the exact steps that customers take as they move from awareness to research and consideration, purchase and delivery, and finally (hopefully) to loyalty and brand advocacy.

If your research sample is large enough, segment the results based on where participants fall along the journey map. This allows you to analyze how your customer’s mindset and behaviour changes over time.

Look for recurring trends or common roadblocks for each of the different stages. This added context can help you make more specific improvements to the entire customer experience.

How to Deliver on Customer Needs

Once you have all the necessary insights to identify your ideal customer and their needs along the buying journey, it’s time to put the information to good use.

First, review the research for any glaring problems that need a quick solution, especially anything driving customers away. Prioritize these issues and assign the appropriate staff to implement changes.

For example, if multiple customers expressed frustration about long wait times for answers to simple questions, you may decide to add a FAQ section or a live chat option to your website.

Customer research is about more than finding problems. Just as important is using the information to make proactive changes that allow your company to grow. Every part of your company can benefit from the insights of a customer needs analysis.

The key is to look for gaps between your business and customer needs. Finding innovative ways to reduce even minor gaps can make a significant difference in customer acquisition and retention.

Marketing

A customer needs analysis almost always offers insights for optimizing marketing efforts. The better you understand customer mindset and customer behaviour, the more effectively you can tweak your marketing messages.

Use the data to speak specifically to the needs of customers at every point along the journey map. Your research should tell you exactly what will motivate them to make a purchase.

In addition to understanding what content will resonate best with customers, you’ll also know their preferred social media or other marketing channels.

Offer development

Asking questions about what customers wish your product or service did can help you discover areas for improvement or create an entirely new offer.

Examining the data to determine a need before taking action dramatically improves the success rate of new product or service offers.

Also, when you repeatedly and consistently conduct customer needs research, you’ll be more likely to notice a shift in market trends early. This can help you be the first to address a burgeoning need and capture market share before the competition.

Customer service

Identifying the varying needs of customers along the journey map can help you better tailor good service solutions. It’s easier to capture questions, comments, and suggestions when you know the preferred social media channels.

Knowing where roadblocks tend to occur along your customer journey map also allows the customer service team to provide perfectly timed help. This includes upsell and cross-sell offers that solve the exact problem that your customers face.

Customer retention

Studies have shown that acquiring a new customer costs at least 5x more than retaining one. The best use of a customer needs analysis is to devise methods for reducing customer churn and creating repeat, loyal buyers and brand advocates.

Customers’ expectations include special recognition when they’re a “good customer,” according to Accenture. Use your research to ask about ways your customers would like to be acknowledged (handwritten notes, social media shoutouts, discounts, etc.).

You can also ask questions to test whether a referral program might be beneficial in growing your market share.

Ongoing Market Research

Ongoing market research

After making changes based on customer research, communicate them to your customer base. Share the story of how you identified customer pain points and the efforts you took to resolve them. It demonstrates that you care about customer experience, which builds trust and increases engagement with your brand.

It’s also essential to ask for customer feedback on how well those efforts meet their needs. This is an excellent opportunity to send another survey and collect more data.

Your research shouldn’t end there, however. It should never end. Build feedback loops into your business operation so that you are constantly revalidating your unique selling proposition (USP) and always striving to understand your customers’ needs.

Keep a pulse on how your customers feel with interviews, surveys, and social media polls. Also, frequently review metrics like conversion rate, acquisition cost, and customer lifetime value to track how well you’re meeting customer needs.

Some businesses may assign a dedicated team to collect customer insights, while others may prefer to add it to the responsibilities of existing departments. Either way, develop a system for discovering, analyzing, and delivering on customer needs.

By creating a repeatable process, you’ll shine a bright light on customer experience and stay one step ahead of the competition on addressing customer needs.

How is your product received by consumers or business decision-makers? What are the pros and cons of a change in an existing product feature or new varieties of your current big-sellers? Why is a product failing to perform? You want to tweak a formulation, messaging or packaging to cut costs or reach new audiences – but will that scupper or supercharge your sales? The answers to all these questions can be found in product testing research.

What is product testing?

With product testing, we’re not looking to establish general consumer attitudes or behaviours. Nor is this about standing up a new concept or looking for gaps in the market. The primary job of product testing is to tell us how people respond to an actual product – including how they use it and what they think its qualities are – allowing brands to decide whether and how to market it.

When should I do product testing research?

Let’s look at the natural marketing life-cycle to explain how product testing research can support the emergence, and successful exploitation, of a product – and place it in the context of a wider field of market research:

  • Ideation – dreaming up an idea worth pursuing. Research helps identify unmet consumer needs, value-chain opportunities, potential applications of innovation and new markets.
  • Screening – a rigorous approach to deciding which ideas are worth pursuing, again drawing on research and feasibility work, and assessing potential audiences.
  • Concept testing – seeing how the manifestation of ideas might work in the market, leading to additional screening out of less viable concepts.
  • Prototyping – designing products to prove mass production feasibility, form factors and feature sets.
  • Early product testing – evaluating consumer attitudes to the product itself, either in controlled settings, in the field or in everyday contexts; typically unbranded or with highly simplified packaging.
  • Late product testing – which might include feedback from earlier tests to refine messaging, packaging and final form factor.
  • Testing iterations of a product to forecast the impact (on sales and usage) of changes to features, formulations, targeting and marketing – often in response to changes in sales patterns or negative customer feedback.

In other words, product testing is distinct from concept testing. It’s all about refining the delivery of something that is (or soon will be) a finished product. This might include changes to feature sets, the marketing pitch, pricing, ideal target audience and other details. It’s not so much whether the product works – it’s how the product will work best.

Use cases for product testing research

In summary, then, you can apply product testing to:

  • Find out how a close-to-final version of a new product might perform.
  • Tweak that product to optimise its performance on launch.
  • See how a new product is performing post-launch.
  • Test the effect of changes to product design or presentation.
  • Evaluate or explore how a product is marketed.
  • See how well consumers in a new market will accept an existing product.
  • Undertake ‘penalty analysis’ to see which qualities, when changed, alter consumer options about a product.

Product testing in action – a case study

One way to think about the value of product testing is as a way to optimise the introduction or evolution of a particular product. A good example is work we’ve done with a beverage brand to launch a new range of iced teas. The client wasn’t launching a brand-new product – they had worked up some new flavours and wanted to know which they could launch successfully, how these might affect brand perception and what consumers made of them.

There were eight formulations to be tested. We added in an established variant to act as a benchmark, giving us a way to test the relative strength of the products. We measured various metrics with consumers to provide comparable scores as a key insights.

The product isn’t necessarily going to change in this case. It’s a chance for the client to check which variants might work best, to optimise the roll-out and then make minor refinements if the research delivers consistent feedback on particular elements. How research subjects describe the teas might also help shape marketing and packaging for instance.

In other cases, clients might test out product names and straplines on consumers while they’re testing the product to create a range of possibilities, not just on the branding and marketing, but also on likely target audiences and even pricing. Does the product live up to a premium positioning? Or will it chime with more down-to-earth messaging?

The role of product testing guidelines

We work with many clients that have well-established product testing guidelines – a set of standards that enable them to better evaluate products over time and give them clearer benchmarks for making decisions. For large corporates in particular, the product testing research project is an exercise in generating fairly standardised numbers – data that fits a well-established, almost algorithmic approach to evaluating potential product performance.

When this isn’t the case – or if the guidelines are relatively basic – it’s a good idea to establish some clear ground rules at the start of a project to ensure it delivers insights that will shape client decisions. You might need to agree:

  • How the product should be stored, prepared, presented and used.
  • The audience it should be tested with, and how to recruit them.
  • Where to conduct tests with participants (see below).
  • What metrics to record.
  • How to record their experiences – and other feedback.
  • The research methodologies that will work best.
  • Whether to use a control product for comparative purposes.

Introducing a framework helps everyone understand what success looks like for a product: for it to go forward, what will the research need to show? Is it being on par with an existing or rival product on overall performance? Does it need to be statistically stronger on key metrics?

In some ways, it’s akin to a science experiment: you outline the aim (proving it’s better than the existing product) based on your prediction (the product design); we provide a sound, rigorous methodology to test that assumption (the research); and the result gives conclusive result to tell you how to proceed.

How does product testing work? Where and how to test

Different objectives of product testing will suit different methodologies. A lot depends on what brands already know about the product and the way it’s perceived; on what they want to learn from the tests (see below); and the type of product under review.

There are broadly three environments to conduct product tests. Let’s look at the use-cases and the pros and cons.

1. Central Location Testing (CLT)

This is where participants are invited to a facility to undertake the test. This is ideal for evaluating products in controlled conditions, especially when testing a variety of use cases. It’s also suited to products that won’t be used as much in the home – especially in food outlets, for instance.

A good example would be a new foamless cappuccino we tested. To get comparable results, the same machine was used in different central testing centres, with the client providing an expert barista to produce the same product every time.

CLT is ideal for evaluating products under controlled conditions – testing different fragrances, say, is hard if the conditions allow for cross-contamination of scents. But it’s also very useful where confidentiality is important. We set up a CLT in a hotel, for example, so that a new tech product could be tested by invited consumers without the design leaking. Non-disclosure agreements might be a feature of any product test, but for this kind of commercially or technologically sensitive research, the controlled setting can be helpful too.

The other advantage of CLT is liability management. Some products – foodstuff and cosmetics, in particular – might cause adverse reactions with test subjects, and it’s easier to screen and monitor them on-site.

You can find out more about central location testing in our guide.

2. Street Intercept Testing (SIT)

This is literally grabbing participants in an ambient setting for a few minutes to get them to try something and test their reactions. This works well for relatively simple research – the questionnaire will need to be relatively quick in a supermarket or street setting – and for targeting particular participants. Testing a new cheese at the deli counter in a supermarket would be one application.

It’s also ideal for capturing insights within specific use locations – when a central facility would be a little abstract. We worked with a sports beverage brand to test a special protein-rich drink. The use-case is post-exercise, so intercepts with the target market in a gym setting yielded much more insights than a central location could have.

3. In-Home Testing (IHT)

For many products, the consumer’s home (or, in some cases, their workplace) will be the usual usage location. Getting the products into the home for a period of use, then running online, telephone or face-to-face follow-up questionnaires is a great way to see how they work ‘as intended’.

In-home testing tends to be ideal for more sustained testing. The taste of a new iced tea or reformulated cheese can be tested fairly immediately. But a toothpaste, cleaning product, in-home device or even lightbulb, will only reveal itself properly over a few days’ use. Out of the control conditions, we can learn more about how good instructions for use are; we can see how consumers might use the product in their daily lives or in combination with other products; and we can monitor evolving opinions about the product as they get used to it.

Obviously in-home testing has been popular during Covid-19 lockdowns – not least because many products are now being consumed or used in the home that might otherwise have been ambient products; but also because centralised or street intercept tests have been harder to run for biosecurity reasons.

Note also that IHT allows for different research methodologies. As well as post-use surveys, we can get consumers to keep diaries of use, highlighting a wider variety of situations and providing more qualitative inputs.

Woman scanning food in her fridge with her phone

How to do product testing

Where to start

For many companies, product testing isn’t the start of their journey with us. This kind of research is often part of a much bigger engagement process around a brand or product line; or it might be commissioned by a brand we already do different kinds of work with. So the starting point is rarely a cold introduction to a product.

But even with some engagement beforehand, the first step in product testing is to look at the product and the client’s requirements, and then design an approach that will answer their key questions.

For some, those questions will be extremely precise. For example, one detergent brand asked us to test out a new toilet cleaning product. They knew exactly what segment they wanted to target – ABC1 consumers in their 30s and 40s who were already familiar with the brand – and even the methodology they wanted (in-home testing).

That’s largely a logistical challenge – getting the product and a control cleaner into their homes, in plain packaging, so they can be tested side-by-side; then running an online survey to generate some quantitative data and some qualitative feedback comparing the product to a known comparator.

Another example might be a commercial-kitchen mayonnaise we tested. The client was keen to assess not just how the product performed against other formulations of mayo, but also what professional chefs thought of it in different applications. Will it be at least on par with the existing product? What recipes or dishes did it suit? And how did it compare commercially?

One thing to bear in mind is that you should be testing for things you might change as a result of the insights we generate. Knowing what can change (from packaging and marketing, to cosmetic attributes or even key design features) as a result of the research findings – and what you definitely can’t alter – will ensure the tests are focused and useful.

Methodology reflections

We find that CLT is generally better for ‘sequential monadic’ testing. ‘Monadic’ means the consumer is evaluating a single product, and this is obviously possible in any environment. Even ‘paired comparison’ testing – head-to-head – can be done in-home. But sequencing the comparisons scientifically (standalone, then in head-to-head, for example) often generates more reliable data.

In terms of participant recruitment, clearly targeting the audience accurately – whether in the field, via lists of consumers, or panels – is key. They are often motivated because they receive free products. But in some cases, especially with the more in-depth or time-consuming studies, the chance to earn money is also a motivator.

Hard and soft questions

Product testing can answer a lot of questions. For seasoned clients, they’re often very precise ones – they’re seeking standardised data on usage and performance that will help them contextualise the product within a portfolio.

A good example of a ‘hard’ question might be pricing. Using techniques such as the Gabor–Granger method (to understand price elasticity) or the Van Westendorp Price Sensitivity Meter (which creates an optimal price point for a given audience), research can reveal a lot about the economics of a product.

Hard questions like that are often central, even when we’re working with smaller companies that are looking to take a product from prototype to production and need to calculate the risk/rewards involved.

Smaller companies, however, are more likely to be asking ‘soft’ questions, too, where quantitative surveys are augmented with qualitative insights. They might be trying to learn more about consumer attitudes to the category as well as the product; or develop a deeper understanding either to tweak the product being researched – or inform future innovations.

A good market research agency can really help with this part of the process. For example, in some companies there might not be rigid product testing guidelines in place. But by explaining what they need to know to market the product, what they might be able to change about it and what they’re not sure about, we can help companies come up with fieldwork that will deliver clear metrics and provide answers to their key questions.

What’s the outcome?

A well-planned, well-run product testing project is rarely just looking for a blunt ‘go/no-go’ answer to a product roll-out or adjustment. Although many big brands have a well-established formula for conducting product tests – designed to plug data into their tried-and-tested algorithms – even these clients will often use the test as an opportunity to learn more about the product in different dimensions.

Sometimes that’s just a by-product of a sufficiently expert and thoughtful product test. As market research professionals, we learn a lot more about products during tests than the raw data suggests. Often it’s the degree of flexibility the market research team brings to the product test that makes it most valuable.

That’s true whether the primary objective is standardised data on product attributes – or semi-quantitative work with a healthy dose of qualitative inputs to shape decisions. By making sure the parameters for the product’s adaptation are clear and the questions about it well framed, we can ensure the right blend of methodology and insights meet the client needs.

A good example of that would be taste tests for a new formulation at a chocolate brand. ‘Super tasters’ working at the client will arrive at some finely calibrated formulation, created to be aligned to brand values and differentiate the product. But it’s ordinary consumers whose verdict will shape its ultimate success.

Looking to embark on product testing research?

With experience in product testing research, we can combine the inputs and recommend robust methodologies to make sure the product hits the sweet spot in the market. Find out more about our product testing capabilities or get in touch to discuss with our team.

In this guide we explain how to do international market research, exploring the key considerations to set you up for success.

Why is conducting international marketing research so important?

Whatever you think of it, globalisation is now a fact of life. For more than half a century, the biggest brands in the world have operated on a truly international scale. But in the past 25 years – the internet era – an ability to service global markets much more easily has made an international footprint even more compelling.

Near-universal penetration of the internet – often via a smartphone, equipped with GPS locators, camera and microphone – has created low-friction access for brands into markets they didn’t even know existed. Global supply chains and logistics make serving overseas markets easier than ever. And although there have been notable blips – in the form of sanctions, national protectionism and policy decisions such as Brexit – the overall trajectory is towards fewer tariff and non-tariff barriers to trade.

All that adds up to international business no longer being the preserve of multi-billion dollar blue-chip names; or even mid-corporate specialists and cool brands. Any company can now expand beyond their local market. International marketing today is a much more open field.

But the Covid-19 pandemic has also reminded us that within that global picture, markets evolve unpredictably. And they have always been subject to rapid change driven by local conditions, culture and consumption patterns.

That’s made multi-market insights even more useful for global brands already operating internationally – and any business planning to grow ‘overseas’ for the first time. Marketing research is important even at ‘home’. But in brand-new target markets with high potential, it’s nothing short of critical.

Finding a balance – with pertinent local insights or the one hand, and global uniformity for brand consistency on the other – can be a huge challenge. Marketing textbooks include plenty of examples of a failure to localise products and services, mistranslations of brand messaging (some of which are urban legends…) and other cultural blunders.

That’s made market research a crucial tool for business looking to foreign markets, both to help generate insights that can be benchmarked across their global consumer base; aggregated to inform global decisions; and ensure international progression isn’t tripped up by nuances that demand locally tailored marketing or even products themselves.

Big world, small questions – How to embark on an international market research project

So what does it take to run an international market research project? One fundamental truth about market research holds true whatever you want to find out: the tighter the brief, the more useful the results.

That’s not to say brands could, or should, never conduct wide-ranging and open-ended research studies to test general attitudes or behaviours on a global scale. But while that kind of ‘scene-setting’ work can be very valuable in one location, country or even cultural context, it can be much harder to come up with firm conclusions when you’re trying to be ‘global’. International market research might start out with the intention of finding global commonalities or appetites, but the data collected will rarely reveal universal insights.

It’s more a question setting out the kinds of insights that might drive operational, product design or branding decisions for different markets. Country specific norms for consumers and logistics will affect the brief. And different nations, cultures and infrastructure will dramatically affect the available research methodologies, too. Again: it’s not impossible to design international research projects that have perfect consistency in methodology – but for many situations, it’s also not necessarily going to deliver the biggest return on investment.

There is significant value in getting inputs from research professionals even before setting the brief. Getting those right at the outset helps the market researchers you work with get a clearer idea of how they might target their investigations and sets expectations about what’s possible – whether you’re looking at a single overseas market, the potential for an entire region or tailoring local research work to evaluate global possibilities for your brand.

International, regional or global? Approaching international market research

That decision – one or two new markets, a region (perhaps opened up thanks to changes in logistics infrastructure) or a global snapshot – probably won’t be defined by the research process itself.

For the biggest brands, global methodologies (which you can learn more about here) such as brand trackers might seem to be universal. But you still need to localise the process to draw broad conclusions. This isn’t simply a question of ensuring that two completely different markets generate results that can be compared at the global level to inform business decisions. National and regional situations are constantly evolving, adding different contexts that research should be able to factor in. Just like running focus groups around a large country, the broad methods might be the same, but the way you ask questions and interpret answers needs finesse.

The biggest global brands – such as Starbuck or McDonald’s – often undertake localisation work on their products and services, too. The Tsukimi Burger is alien to anyone outside Japan, for example. Research conducted to support these market-specific development projects is usually undertaken by local teams. But decision-makers at these companies’ HQs will still expect research supporting those decisions to meet their global standards.

For companies breaking into foreign markets for the first time, similar rules apply. They will have a standard of insight they demand from research; but they will benefit hugely from working with research teams or agencies who understand the local cultures, dialects and the most productive research methodologies.

So right at the inception we need to ask some basic questions:

  • Are we looking to assess products that present uniformly across the globe? (An iPhone is the same everywhere; a chocolate recipe might not be.)
  • How would we tailor products or positioning for a local audience? (Is this just packaging, for example, or tweaks to the features to adapt them to local conditions or cultural norms.)
  • What are the financial implications of these decisions? (Tailoring research to local markets and contextualising the outputs against your global strategic objectives is usually fascinating work. But will it create valuable enough insights to offset the cost of both the research itself and the tailoring?)

Speaking our language

One of the biggest issues for research internationally is translating your project into different languages (we explore that in detail here). That means not just the questionnaires or scripts that you use, but the brief (so local fieldwork teams understand your intent), the responses and insight reports.

In the era of Google translate (and, to a lesser extent, the use of English in many markets) this might not seem so difficult. But the nuances of language can be a major pitfall for brands and for research projects. Remember, even dialects and local idiom can affect both the meaning of a survey response, a focus group transcript or even the focus of a question.

Language and culture across South East Asia is incredibly diverse, so you can’t simply treat it as a homogenous region. Even in India (see our article on breaking the markets there) there are dozens of languages and cultural identities. And in Canada, for example, you need translators who know Quebecois, not just French. Making small mistakes can undermine engagement and trust, and it’s usually a relatively easy thing to get right if you know what to look for.

These language traps are particularly acute for qualitative work assessing softer or more descriptive product features or emotional product branding –especially if there is a very strong global brand identity that needs to be maintained around any local variation.

Working with local teams to ensure the meaning of questionnaires and responses is captured, not just literal translations, helps ensure marketing decision-makers aren’t trapped. Specialist translation services and research teams on the ground but who are in on the initial project brief are hugely valuable.

Two women having a conversation

Realities on the ground – how cultural nuances can influence your choice of methodology for international market research

There are huge variations in the cultural acceptance of different research methodologies too. In some countries, certain methodologies simply don’t work that well. You might find a survey on WeChat in China works well; but in some markets, you may need to spend more time building rapport with consumers – and allow them a sense of anonymity to build the confidence they need to be open with you. This worked well on a recent project in Saudi Arabia, for example, where we conducted an online community.

Some societies have historically been more open to face-to-face research rather than online approaches (although this is changing as a result of the pandemic), so we often recommend a blended approach to get to comparable levels of insight versus other markets where this might be attainable exclusively through online methodologies.

Even between Germany and the UK the research context varies hugely.  A lot of cultural nuance is rooted in history, too. In eastern Germany, for example, the folk memory of the Stasi is still recent history for many older people – which informs attitudes towards research and certain methodologies. So what you ask, how, where and when will differ in Leipzig compared to Paris or Birmingham, say. (And in much of the US, respondents will typically tell you much more than you need to know!)

And even well-understood quantitative methodologies – that you might think don’t require that linguistic nuance – need to be properly calibrated. For example, point scales vary around the world. In China, people are more open to giving 8s, 9s and 10s; in the UK, these are much rarer. If that’s not factored in it can skew important localisation decisions.

Research projects also need to account for infrastructure and social norms. If you’re investigating the relative strength of a drinks brand, for example, knowing how many people have access to refrigeration at home or whether drinking in the street is frowned upon will be important.

Online – not entirely global

Culture, history, consumption patterns, economics, language and infrastructure aren’t the only variations that need to be taken into account for an international research project. Technology has a potentially huge impact on the types of research you can conduct and how well it works.

The rate of adoption of devices and quality of connectivity in each market is a big factor. In some developing countries, you’ll need to tailor a more light-touch experience, with lower bandwidth requirements for online and mobile methodologies; in others, you can use more data-intensive approaches that are demanding on bandwidth and storage.

The smartphone has flattened out some of the methodological variety between markets, it’s true. Take Indonesia, for example. It was always very much a face-to-face market. But that is changing, as the need to inform faster decision making grows, with research through online panels– like our KOINS panel – taking off.

But there are still very clear cultural differences that mean it’s not simply a question of getting every market to download the same app, for example. Yet again, local knowledge is key – not just of those cultural or technological norms, but also of regulation. Data protection laws vary widely, for example.

Online survey methodologies can also lay traps on language. A couple of years ago, lots of brands were interested in the idea from Scandinavia of ‘hygge’ – a king of super-relaxed personal indulgence. There is also a word in Dutch to imply a notion of ‘coziness’, but it’s a different concept. If that crops up in responses, is it the same thing or not? Automated keyword searching and the surging use of AI analytics might not give you the whole picture.

In short: think global, research local

The smartest headquarters’ marketing teams already understand what needs to be tailored locally and what of their global branding they can apply in existing or new export markets. Knowing you can apply product branding across different markets can mean finding huge economies of scale in creative execution and being able to hook local variation into a wider brand image.

They will also trust either local marketing teams, or research specialists with local knowledge, to adapt both marketing and product sets to the conditions in their target markets. They need to know for each market what’s driving the local nuance and how to marry those with the logistical, economic and branding issues around that market.

And they know that whether it’s the attempt to tests global opinions, the openness of local consumers to existing products and branding or to uncover creative and value-creating local adjustments to products and messaging, there is no substitute for in-the-field expertise of a research partner capable of delivering to brief with the most appropriate methodologies.

The old phrase ‘think global, act local’ might be a tired truism. But when it comes to the way research is conducted to optimise performance in global markets, it’s still the number one rule.

Looking to embark on an international market research project?

Learn more about our international research capabilities, or request a proposal to discuss an international research project with us.

Segmenting your market is incredibly important if you want to achieve success in any industry. It has many benefits, from improved marketing to making it easier to expand your offerings. FMCG (fast-moving consumer goods) are no exception. In fact, there are many reasons why market segmentation for FMCG products is sometimes even more important in this industry than others. There are many steps you can take to ensure your segmentation efforts are as effective as possible for your FMCG business.

First, it’s important to understand why segmentation is so important, and what makes FMCG different from some other industries. Then, we’ll move onto some key best practices for FMCG market segmentation.

Why is market segmentation important?

Whatever industry you’re in, it’s almost always helpful to segment your market into different slices based on a range of factors like needs, values, behaviours or interests. This has a wide range of benefits, such as:

  • It helps you better target your audience. Instead of developing products for a broad range of people, you can hone in on a specific segment and create a product that addresses their pain points more effectively.
  • It allows you to market more accurately and reliably. As above, when your target audience for marketing is more precisely defined, you can create marketing materials that speak to your prospects more directly, helping you build more meaningful relationships, engage them more easily, and increase your sales.
  • It reduces risk and optimizes spending. When you (correctly) target a more specific group of people, you increase the chances of successfully converting them to customers. This allows you to use marketing budgets more wisely, focusing resources on people you know are in need of your product instead of taking a costly scattergun approach.

(Learn more about market segmentation in our ultimate guide to market segmentation)

Why is market segmentation important for FMCG products?

FMCG products can be defined as products that are sold quickly and at a relatively low cost. This bracket of goods includes things like snacks, toiletries, cosmetics, and over-the-counter drugs. 

This category has certain characteristics that make segmentation a critical initiative for any FMCG business and will influence the approach you take to your segmentation.

  • With FMCG goods, people’s needs and desires change — sometimes significantly — based on where they are and who they’re with. For example, someone eating out with friends might have very different preferences compared to when they’re eating at home after a long day of work. This means one person may fit into several segments depending on their environment. This kind of fluctuation doesn’t happen in the same way as many other product types, like cars or investment products. As such, an occasion-based segmentation is needed.
  • FMCG is a high-competition space. Just think of the enormous numbers of potato chip brands, or toilet paper options. All these brands are fighting for customers all the time, and to compete in this kind of environment you need a keen understanding of your market and how to target it.
Woman shopping for FMCG products at a supermarket
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Market segmentation for FMCG products — guiding principles on how to get it right

For FMCG businesses, market segmentation should use many of the best practices employed by other types of companies. Here are some ways to ensure you get the most out of market segmentation as an FMCG company.

Get the right people on board at the beginning

One of the biggest challenges when you’re running a segmentation in an FMCG organisation is getting buy-in to the process from the key stakeholders. A segmentation should drive decisions at every level of a business – from marketing to product development – so it’s important to get these people on board at the outset to optimise eventual adoption of the segments.

One way of doing this is to carry out stakeholder interviews with the key people in your organisation. This is important for several reasons:

  • It allows you to gather important knowledge that exists in the business to inform the segmentation itself 
  • It helps create buy-in. By having skin in the game at the beginning, you are able to excite people about the project and create evangelists who will be more likely to harness the research going forwards. 

Another useful tip is to consider a client side “champion” both for the duration of the research and the internal roll out. This should be combined with a client side “core team” with representatives from each of the departments that is planning on using the segmentation. 

Remember that a person’s needs can change based on their environment, which will have implications for the way you approach segmentation in this category.

As mentioned above, one of the unique attributes of the FMCG category is that consumers’ needs change based on the situation. This means that with FMCG products, people don’t necessarily fit into fixed, static segments. As such, a lot of the time, segmentation is done based on occasions.

If we think about the alc-bev category, people tend to consume very different drinks depending on the occasion. Somebody having a beer with dinner on a Wednesday night will be motivated by a very different need than he/she will be when hanging out at a nightclub on Saturday, where they might be drinking something entirely different. Putting this person in one segment would wash out the findings, rather than accentuating the two very different motivations present in these occasions.

For this reason, when doing market research to inform a segmentation, it’s important to be specific about the what and why of the choices people make at different times. Ask them about a range of different scenarios to ensure their diverse needs are represented.

This is important to keep in mind for FMCG products since our habits and tastes fluctuate so much, in a way that they don’t always do with other products.

Identify the segments with most potential for your business

The core element of a segmentation project is the development of the segmentation solution, dividing the market up into segments that you can target. In this stage of the research, it’s important to remember that even though one of your segments might be a relatively small percentage of the market, it could account for a large share of sales. This is a vital principle to bear in mind in any category, but for FMCG it’s incredibly important, given how competitive the market can be. Focusing on a niche segment, by targeting consumers’ needs closely, can be a recipe for success. 

Augment traditional segmentation techniques with (self) ethnographic research

Every segmentation involves quantitative research to group people into segments based on certain characteristics. This allows us to target groups with broadly similar attributes with the same types of product.

We always recommend combining this with qualitative research to get under the skin of your segments and to help you create detailed personas. This qualitative research can take many forms – from in-depth interviews to online research such as an online community.

For FMCG brands, we recommend considering ethnography at this stage. This gives you a unique and unmatched opportunity to really understand your segments— if you really want to get to know your Fitness Enthusiasts, for instance, you want to see them in the course of their daily life. What do they do after work? What does their house look like? What’s in their refrigerator?

Ethnography gives you a level of insight that you can’t quite access with surveys. Doing this in person is incredibly rich, but it can be logistically challenging (particularly during Covid) and costly so it isn’t always possible to take advantage of this method. That said, there are a range of self-ethnographic techniques you can use to gain this depth of insight through mobile research. Examples include asking people to create a food diary, complete videos or photo tasks in store to help you understand the purchase journey or interview friends or family members. 

The insights from self-ethnography can be incredibly rich, helping you to really deepen your understanding of your segments so you can develop products, services and campaigns that really meet their needs. 

Bring your segments to life 

Once you’ve created your segments, the next task is to bring them to life. There are a number of ways you can do this but the first step is to create personas. 

What is a persona? A persona is a fictional profile that encapsulates the core qualities of each segment, including their needs, behaviours and motivations. The purpose of a persona is to help others in the business understand each segment and how they differ from one another so they can better serve their needs. As such, they tend to be very visual so they can be easily remembered and placed at the forefront of decision making. 

Naming here is of vital importance. A memorable name can be really useful in helping stakeholders remember the defining characteristics of a segment so that they live on in the organisation.

Some personas can be as simple as a PowerPoint slide. But at Kadence, we like to take this further, developing a range of visual outputs that you can use to help everyone in the business understand your core targets – from the C suite to the factory floor. 

We’ve developed everything from interactive PDFs to infographics to bring different segments to life. Some techniques we’ve found particularly useful include: 

  • Video-based teaser campaigns prior to unveiling the different personas to build interest and engagement 
  • Posters to bring personas front and centre for employees in the office
  • Documentary-style films with consumers representing each segment. These can be a really effective way of bringing the segmentation to life and helping the key insights stick with stakeholders for a long time to come

(You can find out more about our design team and their capabilities).

Video interview in a person's home

Going global – how to approach international segmentations 

Most FMCG brands are global, but their products can and do vary depending on where they are sold. As such, marketers often ask us if they should have one global segmentation solution or individual solutions by region or country. 

The answer really lies in how you will use it.  If you have marketing teams that are deployed at a country level, then country level is the way to go, with, hopefully, a global framework that the countries all fall into that the global marketing team can use. 

If most of the marketing action is coming from a single global team, then one global segmentation is better so it really does depend on the set up of your organisation and team. 

Need help developing a market segmentation for FMCG products in your business?  

Market segmentation in the FMCG space is a powerful way to dig into your market, better understand your customers, create better products, and get buy-in from leadership for your plans.

It’s crucial to do this right. There are many challenges and potential pitfalls to navigate, but a huge potential upside in an industry where competition is fierce and customer expectations are high.

For best results, it helps to work with the experts. To find out how Kadence can help with market segmentation for FMCG, read more about our segmentation capabilities, our work in FMCG or get in touch with us today.

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Why consider developing a market entry strategy for India?

It’s very simple: India is a huge market. In population terms, it’s now on a par with China at around 1.3 billion people – and it’s likely to overtake its northern neighbour this decade. India is still a young country – 44% of its population is under 25 years old – and is seeing rapid growth in both its wealth and economic make-up, quickly becoming a global hub for technology and manufacturing.

It’s also seen massive urbanisation over the past 50 years, with six megacities in excess of 10 million inhabitants: New Delhi (31.2m), Mumbai (21m), Kolkata (15m), Bangalore (12.8m), Chennai (11.2m) and Hyderabad (10.3m). Like China, the latter years of the 20th century saw a rapid expansion in the middle class as the impact of globalisation opened international opportunities. The number of households with a disposable income of more than $10,000 a year leapt from around 2.5 million in 1990 to nearly 50 million in 2015.

India’s links with the rest of the world have not always been easy. Their historic relationship with the UK, for example, created lasting cultural ties, but is scarred by colonialism, too. Although India’s recent history as a global powerhouse has been tense at times, businesses from all over the world – and especially anglophone nations and Asian neighbours – are now deeply enmeshed in its economy.

Brands interested in getting into the Indian market will find a strong legal system, democratic structures, a broadly market economy (although with caveats – more on that below) and an entrepreneurial and aspirational customer base with wide interests and diverse patterns of consumption.

One problem for overseas brands coming into the Indian market is that many decision-makers outside the country retain a very mythologised view of India. It’s still perceived by some, for example, as defined by widespread poverty and fixed traditions. While there is poverty – as there is in every country – a rapidly growing middle class and highly advanced tech infrastructure tell a far more nuanced story.

Nevertheless, brands entering India must be ready for a land of diversity and contradictions. This is a nation with a successful space programme; but faces complex challenges resulting from inequalities. It has a thriving cultural industry, and produces (and exports) some of the world’s best medical professionals; yet is in the third quartile for life expectancy.

So it’s no surprise that businesses both large and small rely on local expertise to ensure they can navigate the highly diverse and nuanced byways, trends, localities, attitudes and expectations that make up ‘India’. And it’s a reminder that proper research of this market – or, perhaps, these markets – is an essential stage for successful market entry.

Understanding the challenges – the barriers to market entry in India

Before brands even get to researching the nuances of the different markets in India – and which of them might turn out to be fertile ground in terms of consumer or B2B attitudes and behaviours – they need to some investigate the practical issues confronting companies entering the market.

At the highest level, Prime Minister Narendra Modi has looked to extend the ‘Atmanirbhar Bharat’, ‘make in India’ or ‘self-reliant India’, policy to accelerate the country’s economic development. This is built on five pillars, which offer some guidance for brands looking to enter India on the country’s political and economic priorities:

  1. Economy – designed to deliver significant growth, not incremental gains.
  2. World-class infrastructure – to facilitate additional growth.
  3. Technology focus – where India’s vibrant tech sector offers strong foundations.
  4. Vibrant demography – harnessing the energy of diversity for self-reliance.
  5. Demand – a huge and growing population can massively fuel domestic economic growth with the right supply chain capabilities in place.

It also means restricting imports of many goods that might be manufactured in-country. Modi talks about creating a ‘new paradigm’ for job-creation and entrepreneurialism. “The mindset of free India should be ‘vocal for local’,” he said in August 2020. “We should appreciate our local products, if we don’t do this then our products will not get the opportunity to do better and will not get encouraged.”

In practical terms, that’s meant high-profile bans being phased in on imported armaments, for example (although not to universal acclaim). During 2020, the country’s three Covid stimulus programmes were labelled ‘Atmanirbhar Bharat’ packages; the development of Covid vaccines was cited by the Prime Minister as a success for the project; and India is planning a domestically equipped and run 5G network. There’s also been a push on loyalty to local brands in many consumer categories – right down to cooking oils.

Looking more broadly, India ranked 63rd in the World Bank’s latest Ease of Doing Business rankings, scoring well for investor protections, getting credit and access to utilities; but very poorly on enforcement of contracts, registering property and starting a business.

The rules for trade are also complex. Even after the departure of Donald Trump and his hostile trade policies, India maintains considerable tariff and non-tariff barriers to US trade. And only China has more entries than India in the UK government’s lists of trade barriers for businesses looking to operate abroad. True, some are minor – such as adding labels to food and drink products; others are in very niche sectors, such as the export of luxury yachts.

But non-Indian professional services firms – legal, accounting, architectural – face considerable barriers to entry. And finished cars (including second-hand vehicles) face a basic customs duty of 125% – which can be augmented with additional levies taking total duty in India as high as 260%. There are even moves to adjust duties on car components and kits to deepen the Indian manufacturing base beyond in-country vehicle assembly.

Both national and state-level controls and tariffs need to be evaluated, and it will pay dividends to take advice on specific sectors, categories and regional variations from both home-country trade advisory teams and local Indian experts on the ground. India is not, therefore, a place to skimp on market research.

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Opportunities still abound

But don’t think this means the door is slammed shut. “It’s not going back to socialist India – we want imports to come in,” said Finance Minister Nirmala Sitharaman, speaking at The Economic Times Awards for Corporate Excellence in 2021. She says the government has been selective in choosing sectors to face rising tariffs. And the policy is far from universal (or universally popular), despite the nationalist rhetoric. So change is not inconceivable.

Trade does remain vigorous. India was the 12th largest export destination for US goods in 2018 (worth $59bn, including services), and the EU exports around €33bn worth of goods and services to the subcontinent each year. And EU-India free trade talks restarted in 2021 after an eight-year hiatus. One recent blip has been Chinese exports to India, which fell 11% in 2020 – albeit to a still massive to $66.7bn. (Note that China remains a major geopolitical rival to India, which shapes attitudes to the trading relationship.)

The recent Britain Meets India report, prepared by Grant Thornton, highlights the scale of inward investment into India (between 2000 and 2020 an estimated $29.5bn of UK capital was invested in India – and that’s just 6% of global investment flows into the country). Trade between the two countries was worth $26.7bn in 2020 alone – even with the effects of the Covid pandemic – with UK exports amounting to around £8bn.

The presence of major global companies such as Apple – especially as an investor in local manufacturing capacity – shows there’s deep interest in working alongside both state agencies and domestic business partners to ensure access to this massive market despite import controls.

Netflix is another example. Despite some initial challenges regarding insufficient Indian content and the possibility of fresh regulation, it’s slated to release 40 local productions to steal a march on streaming rivals, building on its existing five million subscribers. (Although Amazon Prime’s own $2bn investment in India is making Netflix’s progress more challenging.)
So it’s no surprise that many countries are eyeing up India as a potential trade partner. In post-Brexit Britain, Prime Minister Boris Johnson wants to “more than double trade with India to £50bn by 2030”, according to texts of a (Covid-suspended) trade speech the he planned to give in India.

View of Mumbai

Developing a market entry strategy for India: should you go deep or wide?

Standing up the commercial rationale and the practical issues around doing business in the country is a vital first step for brands wanting to enter the Indian market. But the top-level data – the rules and economics– is only half the story. Scale, diversity and local nuance are also important factors, and these demand more careful evaluation.

At the outset of any market entry project, organisations will need to make a series of choices that demand much deeper research into their specific sector, the markets they want to address, and the different audiences they will encounter. In other words, what’s your aim, where will you focus your efforts, what products and services might succeed – and how might you translate this into a sustainable market position?

In a market as diverse as India, that idea of ‘focus’ is central to a successful project. Geographically and culturally vast, the attitude to many of life’s fundamentals differ widely between regions. Of course, there’s language to consider (more on this below). But behaviours and preferences also differ across geographical areas. For instance, in the eastern and southern regions, rice is the staple carbohydrate and hardly anyone uses fresh milk; in the north and west, people eat breads and powdered milk is frowned upon.

That’s just a couple of examples of the kind of consumption gulf that can exist – before we even get to the differences between urban and rural consumers, or cater to varied cultural touchstones.

A misstep many brands make when considering market entry is thinking about how to capture the Indian market as a whole, then. It can be much more valuable to consider which slices of the pie you might be able to go after – the better to tailor your proposition, branding, logistics and competitive position.

Market research in the field: be clear on your objectives when it comes to market entry in India

This idea of ‘focus’ is particularly important when it comes to the market research methodologies you’ll need to inform your market entry strategy.

Imagine a global brand looking to understand its status or opportunities in lots of different markets. It decides to survey 200 consumers in a couple of dozen countries. In Germany – no slouch with over 80 million people, and some marked regional variations of its own – such a study might yield usable national results. But in India, just the top six megacities – each with a very particular identity – comprise over 100 million consumers. Those 200 interviews are only going to scratch the surface of the big cities, let alone the emerging conurbations and rural population.

There are two possible solutions. First, massively increase the sample for India to reflect its scale. Or second, as we mentioned earlier, focus in on higher-probability markets assessed in partnership with local research teams. It’s not simply an either/or choice, of course. But it highlights the need to make some very clear and well-informed decisions right at the outset of any market entry project.

Find the right partner: local research for local people

Because of the diverse nature of India, the key to a great research partner in India is coverage. That starts with teams based in the country whose ability to advise on high probability areas for focus will be much more acute than agencies based outside India.

Then it’s a question of being able to conduct research effectively to flesh out the objectives of that initial focus. The project leadership will need to understand the different regions – and in many cases, have a clear idea about the unique profile of the 28 states and eight union territories that make up administrative India (with all the conditions they impose).

With 415 living languages (22 of them ‘officially recognised’ for the purposes of administration) and countless local cultural nuances, research teams with local sensitivities are understandably valuable. (We joke that every 5km in India the language changes – but watch out, because every 2km there’s a new dialect…) Our teams speak a broad range of languages enabling us to conduct market research across the length and breadth of India.

Harness technology – India’s secret sauce

India is a global leader in technology, boasting one of the largest and best-trained IT workforces in the world. This is no flash in the pan: Indians, particularly in the middle classes, but increasingly across society, are heavy users of connected technologies and mobile devices. It’s a world leader in low-cost data plans, too, and smartphone adoption is widespread enough, even in many rural areas, to allow for the new generation of online research methodologies to make their mark, alongside more traditional face-to-face approaches.

When it comes to online research, to reach the urban middle classes, laptop-based methodologies should work well. It’s worth bearing in mind that good bandwidth can be spotty – which means limiting the use of video-intensive approaches – but surveys and even text-based communities can work really well. And with the level of smartphone penetration even outside the cities, there is even an opportunity to exploit app-based research or community platforms to build long-term engagement and insight.

Watch, too, for the roll out of India’s own 5G network. Like any country – especially one as vast as India – coverage will be limited at first. But as penetration grows, it should offer new opportunities for richer research projects.

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Notable openings – target sectors for a market entry strategy for India

We’ve already noted that global brands in new categories are making a play for Indian consumers – such as Netflix and Amazon Prime in the streaming video space. So where else might brands research a successful move?

Premium brands

While ‘made in India’ is politically potent, for less price-sensitive consumers there remains an affection for overseas brands – particularly those with a reputation for quality and durability. Indian firms are catching up fast (its domestic chocolate brands see huge growth in premium products, for example), but the opportunity persists for now. As BCG noted in 2017, “Consumers in emerging cities… have high purchasing aspirations but are often constrained by product availability.”

Auto brands

While domestic makers Tata and Maruti Suzuki dominate (the former state car-maker now owned by the Japanese motor giant has about half of the market), tech and usage transitions create openings for overseas brands if they partner with local industry. India’s passenger vehicle market is something of a roller-coaster: a period of strong growth was halted in 2019 – unit sales fell 12.75% to 3 million – then further slowed by the pandemic. But the long-run pressure on enhanced mobility should present opportunities.

Fast moving consumer goods

Although this has been a target of the ‘vocal for local’ campaign, there are brands such as Unilever that have retained a dominant position in many categories. That suggests there is an option to leverage strong brand image to gain a firm foothold. In areas such as confectionary, for example, French/Belgian group Barry Callebaut sees huge growth opportunities. Kellogg’s initially struggled in India – it was overconfident with existing product and marketing formulas – but has carefully tailored its approach to succeed.

Youth brands

In more traditional rural areas, the division between young and old is less marked. But in bigger towns, fast reliable internet access and varied career opportunities mean young Indians are developing a more global outlook and in many cases, that creates fertile ground for international and ‘cool’ brands. With a median age of just 28 (across Asia as a whole it’s 32) and the ‘millennials’ ascent into higher income brackets, catering to youth in India has huge upside.

Top tips for success

It’s impossible in a market this large and diverse to offer up general principles that will hold true everywhere. But some of the research basics will serve brands well in India – and there are some tips for making market entry a success.

Let experts find you a product/market fit.

Desk research can take you so far, but local expertise will make the process of investigating high-probability markets much quicker and more effective. Kadence’s India team know where to find the populations that dovetail with your product values and attributes.

Adapt brand, marketing and packaging.

Try to get ahead of cultural biases with your presentation – from packaging (where hygiene and transport conditions are a factor for many Indian consumers, incidentally) to the language used. Guidance on these issues should drop out of your initial product/market fit conversations.

Target your fieldwork carefully.

If you’ve been clear on the product or service qualities and work with local experts who can identify more fertile ground, this ought to be easy. Fieldwork costs can mount up in India – and poorly targeted surveys are both money and time wasted so think carefully about the people you want to reach and how best to achieve this

Stay relevant.

India is a fast-evolving nation and its consumers’ tastes are changing too. Customers will reward brands that stay in touch with them – either through programmes such as loyalty schemes or through longitudinal research projects. These same methods are ideal for spotting emerging local and international rivals, as well as shifting attitudes towards overseas brands.

Above all, respect the fact that India is a single nation in many respects, by a diverse collection of people in others. With 1.3 billion people to satisfy, even the kind of precise targeting we recommend for overseas brands can open up vast potential markets. India is not for the faint-hearted. But the upside is enormous.

Developing a market entry strategy for India?

To find out more about how we can support your organisation to break into a new market, learn more about our market entry services or get in touch to discuss a potential project. Alternatively, you can consult our market entry resources – from our ultimate guide to market entry to our tips for breaking into China.

Launching a new fast-moving-consumer-goods (FMCG) product is a process wrought with challenges and notoriously difficult to pull off successfully. In fact, it’s such a treacherous domain that approximately 80-85% of all FMCG launches fail! So how do you successfully launch a new FMCG product in the market?

Companies need to do all they can to maximize their chances of success when it comes to launching their product. This means getting all the different stages of the process right, investing the right amount of time and resources into planning, and making use of all the tools and knowledge at their disposal.

In this article, we’ll show you how to launch a new FMCG product in the market successfully. To do this right, you need to start at the very beginning by considering what makes any FMCG product successful.

What makes an FMCG product successful?

There are a number of factors that successful FMCG products have in common. Let’s take a look at 3 things that separate good products from failures.

They’re distinct

Successful FMCG products have to offer something that sets them apart from all the other similar products on the shelves. However, this can be a tricky balancing act — you don’t want your product to be so different that it moves away from what the customer wants. 

If, for example, you’re selling a brand of instant coffee, you know your customers want some variety of coffee that they can pour into a mug and get a fresh beverage in seconds. But at the same time, you want your product to stand out and offer something more than all the other instant coffee brands. 

Brands that can strike this balance right and create a distinctive FMCG product that continues to delight the customer will be on the road to success.

They’re what people want right now

The FMCG space is defined by being in a constant state of change and flux. Innovation is happening all the time, and people’s tastes are constantly changing.

Successful FMCG products are able to tap into trends and popular demand, giving customers what they want right now as opposed to what they wanted five years ago. For example, as people become more health-conscious their taste in snacks has changed. The companies who picked up on this change in demands and adapted their product offering to include healthy, low-calorie, high-protein snacks were the ones most able to adapt and succeed in a changing market.

They persist

In a market where goods go in and out of fashion quickly, brands that can stand the test of time are at a huge advantage. Household names like Coca-Cola, L’Oréal, and Nestle are household names because they’re masters at staying relevant and in-demand in markets that are prone to constant change.

Doing this successfully requires an intimate knowledge of your market and customers and a knack for constantly delivering even as tastes and trends evolve.

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Why do FMCG product launches fail so often?

There are lots of reasons why launching an FMCG product is so hard and why so many fail. Here are some of the main reasons FMCG launches tend to come up short.

It’s a competitive space

There’s no getting around it — there are lots of FMCG products out there. When you enter this market, you’ll be competing with many other brands, brands that have often been in the game for many years.

If you don’t get it right from the very beginning, you’ll never be able to effectively compete and your target customers will go straight to the brands they have been using for as long as they can remember.

Failure to use data and market research properly

Today’s businesses are blessed with more data than ever before in history. Much, much more. And this can be augmented by wider market research to understand the market, the key trends at play and reactions to your concept or product. If used correctly, this data and insight allows you to better understand your customers,  and launch a product that takes the market by storm.

Unfortunately, many FMCG brands fail to tap into that rich reservoir of data, missing out on the advantages it offers and instead launching a product that isn’t closely aligned with what customers want.

Development costs and lack of funding

Another characteristic of FMCG launches is that they’re expensive. Developing a successful FMCG product can cost a huge amount of money, and this typically requires a lot of reliable funding and investment.

If you fail to secure enough funding for your project, you’re setting up the entire launch for failure.

Failure to understand timescales and stick to them

Launching an FMCG product involves a huge number of moving parts and deadlines. If you aren’t careful, it’s easy to mess this up and end up falling behind the dates you promised.

One clear example is shipping times. If your product fails to reach your customer within the time they expect, you’re creating a recipe for canceled orders, damaged reputation, lost money, and a failed launch.

Failure to understand the importance of constant innovation

The FMCG space is defined by constant, ongoing innovation. Companies are investing vast sums of money into making sure their next product is enough to stand out from the fierce competition and keep customers delighted. To survive and succeed as an FMCG brand, you need to be constantly learning, adapting, and innovating. It never ends, and it’s the only way to avoid failure.

Consumer looking at FMCG products

How to launch a new FMCG product in the market successfully

Understand the market and your customers at the outset through market research

Understanding your customers and the market is absolutely critical when thinking about how to launch a new FMCG product in the market. You need to know as much as possible about your customers’ pain points, desires, their demographics, what they’re already buying, and more. 

Understanding the broader market you’re operating in is important too. This can help you identify trends to capitalize on and size the opportunity for your FMCG launch. 

This research should take place long before the product launch, in the initial stages of planning to help inform the ideation process.

Testing, testing 

Research is also important later in the process when it comes to testing your ideas with consumers. Quantitative concept testing can help you whittle down your ideas and select the ones with the best chance of success to take forwards. Qualitative concept testing can help you to further refine those ideas in line with consumer wants and needs. There are also other elements of research to consider further down the line once you reach the prototype stage, such as pack testing, central location testing or test tastes to optimise your product ahead of launch. 

You can read more about what research you need to consider at each stage of the new product development process in our guide. 

Get your marketing right

Effective marketing is a crucial element of every FMCG product launch. Use insights from the NPD process to guide your messaging – on the pack, at the point of sale and in your marketing and comms – to cut through with consumers and steal share of market.

Always be learning 

Testing should be an ongoing process — make sure you continue to test, measure and learn, even after the product launch. Collecting data, and making tweaks in response to the feedback you receive can help inform product relaunches or line extensions to keep you at the forefront of your category. 

Launching an FMCG product is no mean feat. It’s famously hard to pull off, and statistically most brands who attempt it fail. But that doesn’t mean it’s impossible, and with the right approach and expertise, you can significantly improve your chances of success.

To find out how Kadence can help you boost your chances of success with an FMCG product launch, get in touch.

Concept and pack testing is an area that’s ripe for innovation – a need made ever more pressing during the Covid-19 pandemic. Watch this 15 minute video to hear how we worked with Asahi UK to pilot the use of augmented reality for this purpose, testing pack designs for Fuller’s London Pride.

We’ll share our key findings, focusing specifically on what we discovered about the value of using AR versus static 2D images. These insights will have value to any researcher looking to broaden their toolkit and harness new technologies in the “new normal”.

This is is the first of Kadence International’s Micro Masterclasses, 15 minute videos designed to provide fresh thinking and a new perspective on research methodologies.