15 Jul 5 Mistakes in Your Industry Analysis that can eventually kill your business!
The illiterate of the 21st century will not be those who cannot read or write, but those who cannot learn, unlearn and relearn.
Many white collard civilized predators (read: marketers) trained in assessing the lay of the land over firm handshakes and pleasantries, sometimes entirely fail to comprehend what they’re into.
Putting the blame of failure on a strategy or tactic has become the norm.
Even during a what went wrong session, people seldom think as far back as the market research they did.
But scratch the surface, and you’ll realize not everyone has got their analysis right. Let’s look at certain mistakes in this respect, which can be fatal for your business.
1) Falling Victim to Confirmation Bias!
While examining a market, assumptions are made on the available data, past researches, case studies. This, along with a marketer’s past experience forms the fodder of the analysis.
Hence, it’s quite natural that the inferences, unwittingly fall close to what the marketers have previously seen or known. It’s only human to confirm to stereotypes; thesee, I knew it, happens with all of us.
Looking beyond what one has encountered before isn’t easy.
It’s important to be open to new inferences, not underestimating one off occurrences, taking every market research into account and never missing the details.
In the mid 80s Coca Cola committed a grave mistake of assuming that only its taste mattered to its consumers, completely neglecting the audiences emotional involvement with their brand.
It was a classic case of misinterpretation and confirming to bias.
2) Preferring What’s in Vogue over What’s Tried and True!
Anybody can get seduced by this, including the best of business leaders and technocrats. Marketers are often seen abandoning the old and going for what’s in trend.
Sometimes it can be worth it. But, taking chances is exactly that taking chances.
Is your organization in a position to do it (financially)?
During 1985, after the ouster of Steve Jobs from Apple, the market share of Apple kept steadily deteriorating. So much that within five years of Jobs’s dismissal it went from a market share of 16% to 10.7%.
Within this timeframe, Apple had tried to go with what’s in trend and introduced many new products in a bid to beat the competition, like Apple Macintosh Portable, Apple Newton, Apple Pippin, etc. But, it failed to get its market share back.
At the time when Steve Jobs was brought back in 1997, Apple had 40 different products and was well on its way to a doom.As soon as he came back in, he pressed for getting the emphasis back on its core products.
3) Not Spending Wisely: Spendthrift or Stingy, Both Are Hazardous!
Splurging is no way to ensure accuracy and acting stingy may cost you in the future. See, how far something is related to you. Spending on something just because it’s engaging doesn’t make it useful.
Manage your budget wisely. Draw up a list of-:
a)What’s indispensable and is within your budget
b)What’s needed, but will be too costly.
c)What can you do without.
d)What’s not so much needed, but is dirt cheap.
e)What’s cheap and is also fairly needed.
Conserve time, money while ensuring accuracy in your analysis. If that means hiring professionals, so be it. Trying to do it yourself would anyway take up your time and may not even be that accurate. As a side note, in most companies, market research expenditure isn’t found to be too impressive. A survey by Frost and Sullivan in 2013 stated that the average market research spend of companies was not more than 1% of their revenue.
4) Not Applying Enough Checks to Ensure If You’re Heading in the Right Direction !
This is one thing you can’t afford to bungle up!
Whichever way you choose to research, make sure it gives you what you want to see by the end of it.
The whole exercise is linked with your goal, your ultimate plan. If you have a blueprint of it every moment in your mind, it’s quite likely that you won’t go wrong. Your Analysis must answer questions that will become the cornerstone of your business. Ask yourself-:
a) Does your analysis tell you, in clear terms about your market size; demand and supply scenario; your scope of carving a niche and the ability to sustain?
b)Will the analysis help you in measuring yourself in terms of Newness, Performance, Design, Price, Accessibility Convenience, Technology, etc.
c)Does it help you do the SWOT analysis, understand competition and existing trends better?
Both your Primary and Secondary Research must tell you what you need to know in clear terms.
5) Basing Each and Every Decision on Your Market Research!
Do trust in your market research and analysis, but not blindly. Market research also has its limitations.
Adrian Van Hooydonk, Director of Design at BMW, told Wall Street Journal in 2008, why they don’t rely on customer advice. The customers, he said, judge them based on the world’s current technological atmosphere. They can’t possibly suggest what design would be useful in 2018.
Everyone knows how Steve Jobs, famously never believed in asking his customers what they wanted.
Besides, nothing can give you a foolproof view of what customers feel, understand or know. Sometimes they don’t even know what to make out of a product or brand. Their buying decisions don’t always have an explanation.
Leave out some scope for basing your decisions on your own insight, team advice, current state of the market i.e., it should be a mix bag.
Doubts encourage caution; it is absolute surety that catch you unawares and throws your business in a state of turmoil.
Many a times company’s senior managements undermines or under utilizes their own market research, as they want to focus on growth, diversification, finding new customers or because they’re so strongly inclined towards their predetermined plans and fixed strategies.
Wisely done market analysis can be your biggest asset to augment business.
Decisions aren’t always as easy as the Occam’s razor; they need to be thought through.
Every industry has its set of do’s and don’ts; but overlooking your industry analysis or not making the right use of it is definitely not one of them.