“Don’t judge the choices of a customer. Understand why they make them.”
I did not realize the importance of Professor Stone’s words in class, but they did ring a bell to me while I was doing research for my blog due this week. Companies like Tata, OnePlus, and Niantic seemed to have taken note of these words. However, a close look into these companies and you’ll notice that their initial success and eventual downfall was all down to lack of market research.
Upon reading what VisionCritical had to say about monetization of the research industry, I realized that Tata’s success in India tells you that they did at least one thing right, market research. When you’re looking to launch a product into the Indian market, you must consider certain factors. India’s population is the second largest in the world, giving automobile companies a tough time deciding which market segment they wish to target. The income disparity amongst the population, amount of competition in the market and various alternatives products in the market means that pricing your products exactly right is of utmost importance.
But Tata nailed the brief. They did their homework and came out on top with the “world’s cheapest car.” Not only did they address the fact that the market was not willing to spend large portions of their incomes on automobiles, but also tapped into the two-wheeler market. Tata managed to sell the Nano as an alternative to two-wheeler and three-wheeler modes of transportation, with a selling price of around CAD 2000, the same price as most two-wheelers at the time. Tata provided people with lower incomes the opportunity to enjoy the luxury of owning a car.
However, Tata’s eventual failure was down to the one thing that made them a success. Consumers began to grow frustrated with the lack of innovation in the model and demanded more from Tata. The absence of a stereo system, automatic windows and other basic gadgets that aided the price point were now becoming an issue. People were also concerned for their safety as the Nano lacked airbags.
Niantic faced a similar pain with the launch of their mobile app, ’Pokémon GO.’ The app launched in July and had nearly 45 million users daily. Niantic catered to the nostalgia attached to Pokémon, and tapped multiple market segments with their new game. However, come August, and their daily user dropped by an astonishing 10 million.
Having gone through these cases and analyzing where the companies go wrong, this week’s COMM 101 has taught me the importance of the market research industry. I’ve realised that it is inherent in not only breaking into new markets, but also a major player for survival in the long-run.
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